Execution only and FCA’s consultation has been playing on my mind. Having navigated decades of regulatory change – from the days of the Mortgage Code Compliance Board to MCOB, MMR to MCD and much, much more I’ve seen the intermediary sector evolve, mature, and throughout strive for better consumer outcomes.
One truth prevailed and still remains today: mortgage advice matters.
It matters for consumers, it matters for financial resilience and it matters for market integrity.
Today, the sector is facing a significant challenge in the form of FCA’s consultation on increasing execution-only mortgage sales.
This represents a real and present threat to the advice model that underpins 98% of new UK mortgage transactions.
ERODING ADVICE
Let’s be clear: execution-only is not new. Lenders have already made huge inroads into what was previously the remortgage market via execution-only Product Transfer sales. My concern is that this same model could expand further, eroding advice in the new business market under the guise of consumer choice and digital convenience.
It doesn’t take a rocket scientist to see that there is also huge potential here for dual pricing to re-emerge, especially in execution only online journeys.
Any intermediary who has been around as long as I have will immediately recognise that potential threat.
Of course, a tiny handful of major, tech enabled intermediaries may build online journeys utilising AI to fight back but for the vast majority in an extraordinarily fragmented intermediary landscape this won’t be the case.
ADVICE PROTECTION IN JEOPARDY
We know from experience that most consumers want advice. They don’t want to navigate complex affordability rules, changing rates, or suitability criteria alone. Advice protects them. It ensures that their needs – current and future – are fully considered.
The push toward execution-only, without the guardrails of proper risk assessment and suitability checks, places that protection in jeopardy.
I don’t believe that intermediaries and their trade bodies can afford to be passive, or tackle this issue in a “softly, softly way” in the corridors of power – the stakes are way too high for that.
LONG-TERM HEALTH
This is not just about defending market share. It’s about defending consumer protection, preserving choice, and ensuring long-term market health.
Intermediaries have fought this type of battle before and can do so again but it will take speaking up, standing together and strong leadership from key firms and their trade association(s) – now is the time to be vocal.
