FSA proposals for mortgage regulation will compromise the independence of
IFAs and intrude on the commercial decisions of lenders, claims The
Exch-ange chief executive Jim Gaskin.
Speaking at the Council of Mortgage Lenders conference in Birmingham,
Gaskin, a former regulator, said he could not see how IFAs can maintain
their independence if lenders assume ultimate responsibility for the
provision of product information to borrowers.
He said that although IFAs are legally bound by best advice, the
regulations could challenge that independence by making them directly
answerable to both clients and lenders.
Gaskin also claimed the FSA risks undermining the commercial decisions of
lenders following its pledge to investigate exorbitant interest rates in
the mortgage market.
He fears that lenders will have to justify their pricing policies to the
regulator regardless of the potential risk posed by borrowers with poor
credit histories. He says: “I do not see how IFAs can maintain their
independence under these circumstances.”
An FSA spokeswoman says: “Consumers have to benefit from an effective
disclosure regime which remains the same whether they are buying direct
from a lender or through an intermediary.”