In a letter to members, director general Chris Cummings warns there are concerns over savings products such as …
The Association of Mortgage Intermediaries says mortgage brokers must be careful of conflicts of interest when selling investment products.
In a letter to members, director general Chris Cummings warns there are concerns over savings products such as accumulation, investment and income plans, as well as guaranteed structured products as they are designed to be sold without advice.
He says: “There is a potential for conflict of interest when a broker is wearing one hat as an independent mortgage broker and another hat as a tied investment adviser. There is increased room for confusion and advice could inadvertently be given in the wrong circumstances.
“The Financial Ombudsman Service is likely to take a dim view of cases where a client is sold a product after originally seeking advice on an alternative area such as mortgages.”
Edeus recently targeted brokers with two guaranteed savings products with Newcastle Building Society while Premier Mortgage Service managing director John Malone told Money Marketing this month that PMS is looking to promote guaranteed savings products by the end of the year.
The AMI note also reaffirms confirmation from the FSA that it does not expect firms to recommend products they cannot access. The AMI says it believes the differences between branch and intermediary prices have narrowed considerably and in some cases favour the intermediary again, with an AMI lender pricing activity report imminent.