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Consumer duty directive

ended 24. May 2022

A journalist at FT Adviser is seeking views on this comment from AMI Chief Executive, Robert Sinclair, in relation to the Consumer Duty directive. He states:

“The mortgage and protection advice sector however does not recognise any of the harms that the FCA and others are citing to justify all these changes.  Consumers in this sector have low inertia and the market is highly price and product competitive.”

What are your thoughts on these comments? Do you agree that markets that are operating well in terms of competition and price risk being caught up in onerous regulation? What would you like to see when it comes to the mortgage market? 

 

4 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
To be absolutely clear, what we are talking about here is a 14.8% increase in the appointed representative levy on networks. That's 14.8% additional costs that will be passed on to mortgage brokers on top of all the other recently increased fees. The reason for this surge is to pay the FCA's costs to authorise and regulate cryptocurrency firms, rationalised away under the flimsy vail that it falls under money laundering regulation. Given my 20 year career in regulatory compliance, I am a huge advocate for well placed and relevant regulation which serves to improve standards and drive the industry forward, together. The FCA, on the whole, do a fantastic job, but in this instance I agree with Robert Sinclair's comments - "death by a thousand cuts" to the mortgager broker.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
My criticism of the FCA in their rather expensive ivory towers is that they love to use a bit of jargon and plenty of buzz words but are generally a bit clueless when it comes to just how customers interact with the advice process. That being said, whether we think the mortgage market works or not, it can only be a good thing for the FCA to introduce a duty of care if that drives up standards and means better customer outcomes. One thing I'd like to see though is standards around what is an acceptable service be applied to lenders as well as brokers because too many times, lenders are going AWOL when it comes to sticking to their own turnarounds and processes. This along with a slow homebuying process are the biggest challenges faced by the market, everything else is mere window dressing until that is reformed.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
I think Robert is pretty accurate in his summary. As we are often seeing now from the FCA, rather than deal with specific harms being caused in specific sectors of the market (and let's remember that the FCA's remit is huge, with many different markets being covered), they're now preferring to bring in blanket rules across all the sectors they regulate. This results in massive costs to the industry, that somewhere along the line ends up being passed to consumers, in areas where little of the identified harm is actually being done. Now don't get me wrong, the FCA is absolutely right to take action where it sees consumer harm, but I'm struggling to see how they can justify making mortgage advice more expensive for consumers based on harms they're seeing being done in, for example, the investment advice market.
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Joshua Gerstler
Chartered Financial Planner at The Orchard Practice
"It is correct that the FCA should always be looking at ways to ensure clients are treated fairly. However most Financial Planners/Advisers already do this. It is the small minority who cause problems for the rest of us. The rules in place already require us to treat customers fairly. And even if there were not rules, we would still want to do this. The FCA should spend more time ensuring clients do not work with unregulated advisers, and punishing those advisers who act without the required qualifications and permissions."