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IFAs back FSA regulating loans

IFAs have given their overwhelming backing to the Treasury&#39s decision that the FSA will regulate mortgage advice and general insurance from 2004.

In a poll of over 100 IFAs across the UK conducted by Money Marketing this week, 86 per cent, or 91 respondents, said yes to FSA regulation of mortgage advice and 73 per cent, or 77 respondents, supported the inclusion of general insurance.

Only 14 respondents out of the 106 questioned, or 13 per cent, do not believe mortgage advice should fall under the remit of the FSA while 26 respondents, or 24 per cent, think that general insurance should not fall within the FSA&#39s jurisdiction.

The announcement last Wednesday by Treasury economic secretary Ruth Kelly marks a reversal from the plan outlined in CP98 for the FSA to only regulate mortgage lending and administration but not advice. Writing exclusively in this week&#39s Money Marketing, Kelly explains the move is in response to recommendations by Bank of England economist DeAnne Julius and concerns raised by consumer and industry groups about the importance of advice.

Kelly says: “Buying a mortgage is one of the biggest financial decisions most people are likely to make and high quality, understandable advice is crucial. The change will ensure a high standard of advice is available across the board.”

The Council of Mortgage Lenders is claiming the lion&#39s share of the credit for the policy change, saying it would never have happened without its lobbying of the Treasury and FSA chairman Howard Davies.

CML chairman Roger Burden says: “The CML is entitled to a lot of credit for this change. If the lending industry had given 100 per cent support to everything in CP98, I am not convinced it would have happened.”

Ruth Kelly, p8;

Comment, p19

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