Mortgage Adviser News-revised qualification and new mortgage adviser types proposed

dunstonh

The Financial Services Authority plans to require all mortgage advisers to hold a level three qualification and will apply the 'independent' and 'restricted' labels to all mortgage firms.

The FSA has outlined a series of requirements for advisers in its consultation paper on the mortgage market review. The proposals include:

• All mortgage advisers, as well as mortgage sellers that do not give advice, must hold a level three qualification equivalent to the certificate in mortgage advice and practice (CeMap).
• The obligation to issue an Initial Disclosure Document (IDD) will be replaced. Mortgage advisers will be required only to ‘clearly and prominently’ disclose key information about how they will be paid and what service they offer.
• Firms will have to provide two key facts illustrations: one which presents the costs with and one without the fees rolled up. Sellers will also have to record when the consumer elects to roll up the fees.
• The ‘independent’ and ‘restricted’ labels will be applied to all firms in the mortgage market. Firms which label themselves as ‘independent’ will have to source products from a ‘comprehensive and fair analysis of the relevant market’. In practice an independent firm would be able to use a panel of lenders to offer a comprehensive and fair analysis of the market, but the panel would need to be sufficiently large to ensure it is representative.

http://www.citywire.co.uk/new-model-adviser/fsa-to-apply-independent-and-restricted-tags-to-mortgage-advice/a449650?re=11847&ea=196312

Thrugelmir

From a personal perspective do you think that this will improve the image of mortgage brokers and make the industry more professional?

payless

if implemented:

independent won't need to include "direct deals" but should tell a consumer explicitly whether it will consider direct-only deals.

dunstonh

From a personal perspective do you think that this will improve the image of mortgage brokers and make the industry more professional?

Change a few names for various things doesnt really help. Although full disclosure appears to be a move towards fees which may not be a bad thing. Currently, as seen on this site, no fees but commission is seen as better. Yet fees with commission rebated can often work out cheaper and it removes any potential for bias. Especially if the adviser does include direct deals (which is optional now and will remain optional but there isnt really any reason for them not to do it if you are on fee basis).

I believe CEMAP is level 3 already. So, that wont make much difference for brokers. It will make a difference to bank staff though.

IDD showing with and without fees may confuse consumers even if it is meant to improve the situation. A bit like on pensions which have the "effect of deductions" and is put in future money terms which many people, including Panorama and the media mistake for todays money terms.

Some of it just appears to be reinventing the wheel and giving it a new name.