View more on these topics

Lenders set to escape censure on exit fees

FSA says it never intended to criticise lenders as deadline passes for disclosure of exit fee strategies

The FSA says it does not intend to rap mortgage lenders that have failed to cut exit fees.

HBOS became the latest lender to announce it is scrapping exit fees for new customers this week, following similar recent announcements from Northern Rock, Royal Bank of Scotland, Cheltenham & Gloucester and Standard Life Bank.

The regulator’s deadline for lenders to decide their exit fee strategy for new customers passed this week. But the FSA claims its report was never intended to be critical but rather to detail what lenders’ policies should be regarding exit fees for future customers.

Many have backed down but a number of major lenders have refused to axe fees although they say they will not raise them during the course of a contract.

Alliance & Leicester, which charges the highest fee at £295, and Barclays/Woolwich say they will keep their fees. Other lenders, including Abbey, have replaced the exit fee with a mortgage account fee. Abbey will charge £225 from August 14.

But brokers say they could avoid lenders that charge excessive exit fees.

With the real cost of an exit charge estimated at £35, brokers have questioned how lenders such as A&L can continue to charge such high amounts.

The Mortgage Practitioner sole practitioner Danny Lovey says: “Lenders must remember that they are not more powerful than market forces and intermediaries may well try to avoid dealing with those lenders.”

An FSA spokesman says: “The tone of the report has been exaggerated in the media. This will not be a critical report, it was never intended to be. It will not be the FSA rapping banks over the charges, more an analysis of what lenders have told us they will be doing.”


ABI rejects “anti-IFA” allegations

The ABI has vehemently rejected the accusation that it has become anti-advice and anti-IFA claiming its members view the adviser channel as an essential part of future growth.

Advice model not broken, says Aifa

Aifa says industry research shows that the IFA sector had turnover of £6.5bn last year and net profits of 13.5 per cent, which contradicts the FSA’s assertion that the advice market is not sustainable.Director general Chris Cummings says the economic value added to the UK by financial advice and the financial robustness of the sector […]

Less than one in 10 will be able to afford professional advice

Less than one in 10 people will be able to afford “professional” financial advice, with the vast majority of the population in the primary advice bracket, according to the FSA’s own statistics.In its retail distribution review discussion paper, the FSA says the costs of professional requirements for firms operating at the top end of the […]

The links effect

After returning to Carnoustie in Scotland for the The Open golf championships recently, I have no doubt that many people were tired of the re-running of the fateful 18th hole of the final round as played by Jean van der Velde the last time championship was held at the course in 1999.

Graphic content – December; the countries most exposed to a rise in protectionism

President-elect Trump has suggested withdrawing from the North American Free Trade Agreement (NAFTA) and ending negotiations over the Trans-Pacific Partnership (TPP), albeit there is considerable uncertainty over what he will, or even can, do. If one of the main consequences of the election of Donald Trump is US protectionism, it’s worth considering who stands to […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment