View more on these topics

FSA turns to sub-prime and lifetime mortgages

The FSA will focus on sub-prime and lifetime loans in the second stage of its mortgage effectiveness review.

The regulator says it is concentrating on specialised areas where the risk of consumer detriment may be high.

It will also look at whether consumers are taking out suitable, good value mortgages and are treated fairly over the life of their loan, including when they fall into arrears.

The first stage of the review last year concentrated on disclosure, advice and selling practices in the prime market and found that consumers were actively shopping around.

However, the FSA discovered that cheap introductory offers in the mainstream market could lead to borrowers struggling to pay off their homeloans. It found that 41 per cent of customers chose a mortgage on price, focusing on initial payments rather than longer-term affordability.

Director of retail policy Dan Waters says: “This next stage of the review will focus on more specialised sectors where we think there is greater risk of consumer detriment. We will also look at the treatment of customers in arrears.”

Association of Mortgage Intermediaries policy adviser Vanessa Moore says: “It is no surprise that sub-prime and lifetime mortgages will be in the FSA’s focus. The review is high on AMI’s policy agenda for 2007 as the results could lead to a rewrite of MCOB.”


US firm seeks second distribution partner

US manager of managers specialist SEI Investments says it is making progress in its search for a second UK distribution partner as it looks to target high-net-worth clients.

Euro stars

With most of the European economies improving, European shares should also improve, particularly smaller company shares where there is a large amount of takeover and merger activity and a lot of undervalued niche firms.

The transformation

Wrap services are changing the industry and we believe Skandia Wrap has been at the forefront of this development.We realised a couple of years ago that to create long-term value within our business we needed to move away from a business model that relied so heavily on initial commission to a model that was more […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm