Being a mortgage adviser in 2024 is probably the hardest it has ever been. It was not meant to be like this.

The rapid march forward of technology, as our friend, is meant to do all the heavy lifting and as lenders have simplified and automated it should be a breeze. But far from it!

Interest rate volatility has kept all good brokers glued to their desks and screens as products are introduced and pulled with alacrity from all corners of the lender landscape.

INCREASED PAYMENTS

Although interest rates have broadly softened, there are still a raft of consumers facing into significantly increased mortgage payments and holding their hands through the process remains a core part of the job. But it is stressful.

Affordability and criteria continue to shift as lenders compete for business but are all looking for something slightly different to earn a wider margin.

MORE COMPLEX

All of this makes the advice job that little bit more complex. If this was not enough, we have the issues of the FCA looking at outcomes and Consumer Duty rather than just adhering to the suitability and affordability rules.

How do you really undertake a bottom up look at Product Information Sheets, Fair Value assessments and what is a legitimate fee for the work being done? Then you have to sit down and undertake your annual assessment of performance against the Duty outcomes. Many have thought deeply about the value they add.

FAR REACHING

Coming over the horizon is the potential for changes to disclosure on fees that requires careful thought.

The High Court cases some 10 days ago that ruled on motor finance commission reminded us all that while regulation is important there are wider legal aspects to the job. In brief, the adviser can be interpreted as owing a fiduciary duty to the customer as they are working for them.

Well-worded disclosure documents and specific statements on fees and costs have been reiterated in case law. It is likely that these cases will go to the Supreme Court as the implications of the decisions are far-reaching.

FIDUCIARY DUTY

Simplistically, if a fiduciary duty exists, then express written consent for the lender to pay a commission (proc fee) has to be provided by the consumer.

The facts of these cases are a long way from the circumstances of most mortgage cases, but the wordings in the legal judgement leave lenders with limited wriggle room.

It will be dependent on how you interpret context and the role of an independent mortgage adviser versus a car salesman providing finance to fund the car purchase.

ROLES AND RESPONSIBILITIES

You will hear more on this in the weeks to come.

I would ask all in the industry to move slowly, with consideration and ensure that the lawyers are asked questions with context.

It is important to set out the different roles and responsibilities, not just follow the breadcrumbs. The key for me is to ensure the Supreme Court thinks deeply about ensuring any judgment applies to the motor sector and not more widely.

Robert Sinclair is Chief Executive of the Association of Mortgage Intermediaries