Consumer panel wants to keep non-advised sales
The Financial Services Consumer Panel has called for the FSA to scrap its proposed ban on non-advised mortgage sales.
In its final mortgage market review consultation paper, published in December, the FSA proposed non-advised sales should be banned where there is “spoken or other interactive dialogue” between a customer and a firm.
High-net-worth clients are exempt from the proposal and all customers can proceed on an execution-only basis if they reject the original advice.
At an MMR seminar in London this week, FSCP chairman Adam Phillips said: “This has gone a bit too far. The evidence is that it is a market where quite a lot of people understand what they are doing. They need clarity but if they have already taken a mortgage, they should be able to do this on their own again. It makes shopping around more difficult because you have to get advice.”
Phillips suggested the requirement should only apply to credit-impaired customers, equity release and right-to-buy customers and first-time buyers.
The panel called for the FSA to create a new rule immediately to ensure that lenders protect “mortgage prisoners” who have been hit by recent standard variable rate increases and are unable to get a new mortgage.
It also called for the FSA to delay the introduction of its responsible lending proposals, covering the new affordability requirements and interest-only proposals, until the housing market has recovered.
Lentune Mortgage Consultancy director Stuart Gregory says: “Most borrowers do not follow the mortgage market closely so there is a gaping hole in the argument that people who have gone through the process understand what they are doing. In this market in particular, people should be getting advice.”
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Readers' comments (7)
I am really concerned that this group want to keep non advised mortgages but are happy with RDR. Just how independent is this consumer group and who or what has been feeding them information on which they have based their opinion. It does not make any sense!
Just as I thought we would get something from the regulator that supported IFA's and mortgage brokers then in steps a bank biased new regulator called the Financial Services Consumer Panel.
Of course consumers know what they're doing that's why they always ask how much can I maximally borrow - not how much can afford to borrow?
I don't need to repay the capital do I?!!!!!
Its a FSA offshoot just another name but also based in Canary Wharf saying one thing and then changing it to fit in with the Banks and Mortgage Lenders. By they way have a look into their pay for part-time roles. These folks are out of control and we (MPs, TSC and the general public and advisers) just sit back and let them get on with it. More of the same taking income for not working and its dishonest part-time gravel trainers!!!!!
"Financial Services Consumer Panel"
Pardon?
Someone needs to put the "consumer" back in this panel.
Silly pointless people.
Interesting, then how come so many consumers are on interest only mortgages and many were first time buyers a few years ago- and are now as a result mortgage prisoners that cannot move, a dangerous assumption that just because you have done it before you do not need advice, there is a clear inconsistency here. Just who are the consumers that have contributed to this latest "wisdom".
Excuse me! An example of unadvised lending is when (at the top of the market), I advised a client that he could not afford a BTL mortgage and didn't proceed with the case. He then went directly to the lender who promptly did the mortgage and now he is in financial diffs. FSCP wants this to be an acceptable avenue and common practice? How do these people sleep in their beds at night? As an adviser .... I couldn't!
many consumers just want information not advice..are we banning people from making their own decisions regard their largest commitment?
U MUST HAVE ADVICE!!
crazeeee