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AMI says regulator is shifting status stance

The Association of Mortgage Intermediaries has slammed the FSA for changing its rules on mandatory disclosure of status amid turbulent market conditions.

Director general Chris Cummings says Aifa is very concerned about the content of the speech made by FSA head of mortgage and credit unions Jonathan Fischel last week at the Mortgage Business Expo where he implied it was introducing new disclosure requirements solely for independent mortgage intermediaries.

Fischel told delegates that whole of market advisers should acknowledge to customers that there are some deals only available direct from lenders which may be more competitive than what they can offer.

Cummings points out it was left unsaid by the FSA how tied salespeople would have to respond. “To suggest that a direct deal could be more competitive fails to recognise the service provided by an intermediary. This leads to questions such as, should an IFA tell an investment client that they may get a better deal by going direct? Should a tied adviser refer to the fact that their customer may get a better or more suitable product from an independent adviser?”

Cummings says the AMI refutes this position and is worried about the potential repercussions across the financial services market. “The mortgage market has rules relating to mandatory disclosure of status that are clear and should be sufficient on their own.

“The FSA should not choose to announce regulatory changes at a trade show without first considering the wider ramifications of their announcement.”

The Mortgage Practitioner sole trader Danny Lovey says: “The FSA makes policy on the hoof. How many caveats have you got to put on it?”

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