The Association of Mortgage Intermediaries (AMI) has issued a sharp warning that the Financial Conduct Authority’s proposed reforms to the mortgage market risk weakening vital consumer protections and undermining the very principles of the Consumer Duty.
The industry body’s concerns were set out in response to the FCA’s latest consultation on its Mortgage Rule Review, which aims to make it easier, faster and cheaper for borrowers to access lenders, switch products and remortgage. While the regulator has framed the changes as pro-consumer, AMI argues that the proposals could have the opposite effect by marginalising the role of professional mortgage advice.
AMI notes that 97% of all mortgage business is currently conducted with advice, a figure it says demonstrates both the value of advisers and the strength of the UK’s intermediary-led market. The body questions the FCA’s apparent suggestion that this constitutes a market failure, pointing out that levels of customer complaints remain low.
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The risk, it says, is particularly pronounced in the area of product transfers. In 2024, 1.6 million borrowers remortgaged, but 83% remained with their existing lender. Many of those customers nonetheless chose to speak with an adviser, exploring the full range of options and discussing broader protection needs. AMI warns that pushing consumers to go direct could leave them making execution-only decisions without recognising that better alternatives may be available, and without understanding the protection they may be giving up.
“Mortgage advisers play an irreplaceable role in helping consumers navigate complex, life-changing financial decisions,” said Stephanie Charman (pictured), chief executive of AMI.
“You simply cannot deliver the Consumer Duty by removing advice. The Duty requires firms to act in ways that deliver good outcomes, support consumer understanding, and empower effective decision-making — none of which are achieved by steering borrowers away from professional advice.”
The consultation also raises questions over where liability would rest should non-advised customers later complain. AMI suggests the Financial Ombudsman Service could face an uptick in cases from consumers who made unsuitable choices, leading to increased costs for the wider market.
Consumers, the body points out, already have a wide range of options, including direct advice from lenders via branches and call centres, digital channels, and the independent intermediary sector. It argues that the current market already supports choice, and that removing access to advice would constitute a backwards step.
AMI has been working closely with members, the regulator and other trade bodies in advance of the consultation paper’s publication to ensure that the intermediary voice is properly represented. While it supports innovation and efforts to streamline the mortgage process, it insists these changes must uphold the aims of the Consumer Duty and protect access to advice.
“The proposals set out by the FCA go in the opposite direction,” said Charman. “They risk stripping consumers of essential protections while simultaneously threatening the long-term viability of thousands of advice firms across the UK. This isn’t just about loss of income, it’s about undermining an advice model that has proven time and again to act in the consumer’s best interest.”
She added that AMI remains committed to working with the FCA, lenders and the advisory community to simplify the mortgage process, but not at the cost of what she described as the proven benefits of high-quality, professional advice.
