The latest RDR paper confirmed that mortgages will not be included in the review but it says: “Preliminary analysis of firms’ business models suggest that, for example, some banks may consider reflecting the changes required for their investment distribution business by applying the same model to both investment and non-investment business.”
Imla chief executive Peter Williams says this could lead to two different styles of process and a split between IFAs and brokers.
He says: “Our sense at this stage is that the mortgage market will be dominated by commission but there will be a steady migration towards a more fee-based structure over time and the RDR will push that along.
“One begins to wonder whether there will be a retail distribution review for mortgages, given what has happened since the initial RDR consultation.
“We have had a fundamental reworking of the mortgage market and that will have a fundamental impact on distribution and on funding.”