New Mortgage Broker Guide

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Martin nice to see most of the suggestions included... I think its a much better article than before/ draft .

HelpWhereIcan

MSE_Martin wrote: »

It'll be interesting to see how the FSA deals with the growth of direct deals (or should I say competitive direct deals)... in many ways as the battle for so long has been for cohesive advice - this breaks the model and it needs to act one way or the other... whether it will or not..

I know many people think that the FSA acts like the Law Society and protects its members' interests but... the only members it protects are the large banks and insurers.

http://www.mortgageintroducer.com/ccstory/229849/4/Clarity_is_key_in_pricing.htm

The FSA has reiterated its stance on the dual pricing of mortgage products by lenders insisting that the policy is not against its Treating Customers Fairly (TCF) principle.

Fischel said the regulator was concerned about consumers' access to advice and the cost of the advice but it was not in a position to stop lenders continuing with what was a commercial decision.

The point they make is that

there was an option to advise the client to go direct and charge a fee for that advice.

which is fair enough, but their own rules insist that a client must be given a Key Features Illustration when being given advice.

However many lenders (with the exception of the Nationwide) will not even allow a broker to produce an illustration through their intermediary online systems

He said the FSA had been working with AMI on two particular issues, one being broker's ability to attain a KFI and the content of the KFI, the other was the responsibilities of a whole of market intermediary given the current situation.

so a bit of a "awww c'mon, please, let them do it" is the most that the FSA is willing to do with lenders but will happily tell brokers that

Fischel also said that transparency was key for the broker. He added: "The crucial point is ensuring that the customer is made very clear about what they are being provided with. The intermediary should clarify that there are deals only available direct from certain lenders. We don't however think the intermediary needs to be specific about those lenders and the deals."

I am waiting for the guidence that insists lenders are transparent with customers and that they should

"clarify that there are other deals available from other lenders and that a broker will be able to advise them on the best one for them. We don't however think the lender needs to be specific about those lenders and brokers and the deals."

Most brokers are small one or two man bands We all pay our fees to the FSA and live under an increasingly burdonsome regulatory regime but the large lenders and insurers seem to be getting the upperhand in all conflicts - whether it is against the customer interest or not.

The good news is that the Retail Distribution Review looks like it will disqualify lenders and insurers from calling their staff 'advisers' and will insist that anyone who is not Independant is referred to as "sales".

Our day will come (with only a little help from the FSA) but numbers will be greatly reduced and the fee only or fee with commission offset models will be the most common.

A good thing in many ways (transparency etc) and there is still a certain type of broker that needs getting rid of, but the process will be painful and customers may lose out in the short term to hard sales, conditional products and less than transparent product pricing.