The matter to which I refer, is the appalling situation whereby lenders are not only withdrawing many of their products from the mortgage intermediary marketplace but many of them are also refusing to talk to these intermediaries about their direct mortgage deals, even though they have been given written authority by the borrowers.
The huge withdrawal of intermediary mortgage deals over the last couple of months has made the traditional sourcing sites look like wastelands, with lots of empty pages where there used to be schemes. This has also now forced brokers to charge fees in order for them to continue to give true whole of market advice and most borrowers are not willing to pay for this advice.
If this carries on, there soon will not be any mortgage brokers left to advise consumers and they will be left to the mercy of the banks, who will be queuing up to peddle their overpriced products to an unsuspecting public.
How can the FSA stand back and allow this to happen? Surely, the lenders can’t be treating their customers fairly by preventing them access to independent advice, which is effectively what they are doing? If IFAs and brokers were to refuse to deal with the professional representatives of their clients, such as their solicitors, accountants and estate agents, they would be severely reprimanded by the FSA and rightly so. It would seem, however, it is one rule for intermediaries and another for banks.
The feeble excuse trotted out by the FSA is it is not up to them to tell the banks how they should run their businesses but this rule does not seem to apply to IFAs, who are constantly being told how they should run theirs.
If you couple this with the qualification and commission proposals in the RDR, which, according to Ernst & Young, are likely to cause a reduction in IFAs of 10,000 by 2013, the FSA have again shown how they don’t give a damn about the demise of the intermediary market. This will, of course, leave their buddies in the banks free to carry on selling inappropriate and overpriced products to the now unrepresented public.
Clive Matthews, Southampton