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AMI: FCA competition power can help brokers kicked off lender panels

The Association of Mortgage Intermediaries says the FCA’s new competition objective could help brokers fight lender decisions to remove them from panels without good reason.

AMI is handling a number of cases of brokers who feel they have been unfairly removed from lenders’ panels without explanation.

The trade body says some brokers have been removed from one panel for no obvious reason, which then triggers their removal from other lender panels, and wants a standard appeals process introduced to tackle the problem.

AMI chief executive Robert Sinclair says the FCA’s competition objective, which allows the regulator to examine the market power held by providers, low switching rates, and why consumers do not buy certain financial products, could be used to help brokers challenge lender decisions to remove them from their panels.

He says: “As the FCA now has a competition objective it has the capacity to intervene where it feels lenders might not be allowing as competitive a market as might otherwise be possible.

“If some brokers are not able to offer some lenders’ products then it does affect competition. You can understand why someone might restrict distribution at the outset but when large lenders are removing brokers for arbitrary reasons then it seems strange to me.”

Sinclair adds he may approach the regulator to intervene in panel decision cases where competition may be affected.

In 2011 Lloyds Banking Group revealed it had kicked off 900 brokers from its panels for problems including fraud or lack of business.

If you are a broker who has been kicked off a lender’s panel and you feel you have not had a fair opportunity to explain your case, please contact Mortgage Strategy deputy editor Paul Thomas at paul.thomas@centaur.co.uk.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. As we told the old FSA when dual pricing came in, those of us working on a fee basis CAN advise on off panel products available, it is just that the lender or “panel adviser” might not like us sitting in on the clients meeting with the lenders tame salesman “sorry I mean “adviser”.

    This practice is still even happening with the Investment sector as St James Place are establishing group schemes it now appears and when the employee turns round and says they want their own adviser involved, the SJP “partner” still receives the commission, sorry I mean “advice fee” whether they provide advice or not!! How does that work post RDR?

  2. I suspect that the arbitrary manner in which some lenders seem to throw advisers off their panels may amount to a breach of the Data Protection Act.

    If it happens to you, I would suggest in the first instance you make a Data Subject Access Request. (The Act protects a living person, not a business so the individual adviser needs to do this).

    If you do not think the lender is treating your personal data fairly you can ask them to change it and if necessary refer it to the ICO.

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