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CML calls for RDR read-across in fierce broker attack

The Council of Mortgage Lenders has called for aspects of the retail distribution review to be read across to the mortgage market in a fierce attack on brokers.

Speaking at the FSA mortgage conference today, CML director general Michael Coogan said the industry should look at stricter authorisation standards and higher capital and professional indemnity requirements for mortgage advisers, arguing that some brokers have behaved more like “salesmen” in prioritising cashflow over consumer interests.

Coogan argued that smaller firms pose more of a risk than larger intermediaries.

He said: “We need to read across aspects of the RDR sooner rather than later.

“I am yet to be convinced that the right outcomes are being routinely achieved, this is a major area of the mortgage review to address.”

Coogan added: “Some intermediaries have acted more like salesmen more interested in their cashflow than advisers protecting their customers interest.

“It seems in their nature, large intermediary firms are less likely to exhibit this behaviour but the long term of small firms have been largely unsupervised since 2004 and that cannot be the structure that continues in the future.

“We are going to have to look at a combination of enhanced intermediary authorisation requirements, higher capital and PI requirements for firms, enhanced training and a review of remuneration in our sector. Only by this will we sustain quality of advice.”

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