Only 4 out of 50 mortgage advisors giving correct advice..

wymondham

http://news.bbc.co.uk/1/hi/business/7519755.stm

sure this does not include any contributors on here, but it is not a good ratio by anyones standards?

JustP

I think most of the advisers involved were from banks and estate agents. I guess most advisers on here are not in that position.

However, the stats sound awful and unfortunately everyone will get tarred with the same brush.

toonfish

I'm not surprised to a degree but many of those failings in no way mean the client has actually recieved bad advice.

dunstonh

From the article:

"The study found that although there was a general failure among mortgage advisers to give acceptable mortgage advice those that performed best were independent mortgage advisers," he added.

Most of the mortgage advisers here are whole of market or independent. So that reflects better on them.

Which did a similar review about a year or two back on tied agents and IFAs and generally found standards with bank and tied agents was poorer on that as well. However, they did mark cases as failures unfairly and didnt appear to take account of different advice processes. i.e. those that have multiple appointment processes (casual meeting first, second one puts meat on the bone and 3rd one completes the business and compliance requirements outstanding). I wouldnt be surprised if that was the case here as well. Especially if they were seeing banks that offered no advice or generic advice. They wouldnt have a chance of meeting advice standards but then they have no requirement to do so.

Also, a lot of the compliance stuff is done at signing the application. Mortgage advisers get loads of enquiries that never go anywhere. People approach them for "how much can I get" or "how much will it cost" style meetings. Where the person hasnt found a house yet you tend to find that the initial meeting is one which is more casual and basic with the formal side coming when the house is found.

For example, this one here concerns me: This meant they failed to say if their services involved giving advice as well as information, they failed to show the customers an initial disclosure document, or they failed to give them a "key facts" illustration.

Not giving an IDD has no excuse. However, not giving a KFI is certainly not grounds for failure if this is just an enquiry rather than an application. Those doing home visits wouldnt be able to give a KFI either. They would have to go away and research and then print off the KFI. It would be issued on the next appointment once the house has been found.

All that said, I do think it is time that the FSA brought full regulation into mortgages. Partly for consumer benefit and partly for the good advisers that always end up being tarred with actions of the bad. It also needs the tougher standards to get rid of those wide boys that have been encouraged to join over the last 3-4 years as a way to make easy money. That encourages the wrong type of individual.

dunstonh

Just found a bit more information that isnt present on the BBC site but at others.

another was said to have dismissed the idea of interest rates falling – weeks before the Bank of England cut them.

That was a classed as a failure.

So, this mortgage adviser guessed the interest rates wrong. If you look at economists giving opinions on interest rates move you will see that they dont often agree. How do you expect mortgage advisers to guess it right every time as well.

That adviser could have done everything compliantly and correctly but was classed as a failure because ot that.