Master broker Promise Solutions has welcomed the Financial Conduct Authority’s (FCA) report into the quality of mortgage advice for helping to clarify the regulator’s expectations going forward.
The FCA recently published the findings of its thematic review into the quality and suitability of mortgage advice, entitled Embedding the Mortgage Market Review: Advice and Distribution.
In it it revealed some firms delivered advice “with little or no structure meaning advisers typically failed to ensure they had sufficient understanding of customers’ needs and circumstances on which to base their recommendations” while others “placed heavy reliance on completion of point-of-sale application systems, allowing little flexibility for advisers to apply judgement or adapt delivery to meet individual customers’ needs.”
The report illustrated how the regulator expects brokers to offer advice and includes examples of incorrect approaches.
With the second charge market set to become aligned with first-charge mortgages from March 2016, Steve Walker (pictured), managing director of Promise Solutions, says the report gives brokers the chance to get their house in order.
He said: “Thus far it has been all too easy for brokers to misinterpret the guidelines on advice processes. This report plainly states exactly how the regulator expects brokers to offer advice, removing any risk for confusion. It will also come as great comfort and reassurance to those companies in the second charge sector, like ourselves, that have been busy putting plans in place for the post MCD-world.
“At Promise we have spent over a year developing and investing heavily in our technology systems in order to meet regulatory standards when the second charge market becomes an advice-led sector in 2016. During that time it has been difficult to be certain that what we were doing was correct. The FCA report has given us the reassurance that we are indeed on the right track and our work hasn’t been in vain.
“For those companies that perhaps are still unsure it also gives the chance to make the necessary changes now in order to be ready for the new regime. I think the sector as a whole will welcome this report.”
