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Master/servant fear over FSA loan ad rules

IFAs warn that lenders will take control of many brokers&#39 advertising, which could lead to bland and unimaginative marketing if new FSA mortgage rules are applied.

From N3, all intermediaries&#39 product ads must be signed off by a registered individual. But with around half of the 14,000 mortgage brokers not regulated, len-ders are expected to take responsibility for ads, which advisers fear could lead to a master/servant relationship in favour of the lenders.

IFAs believe this will lead to lenders issuing generic ads to unregulated brokers rather than take on the admin nightmare of approving ads from around 7,000 brokers. The move could see lenders preferring to use networks, franchises and mortgage clubs which will authorise the ads themselves.

IFAs say lenders may push for closer links with brokers as they also adopt responsibility for documentation given to consumers by brokers post-N3.

Mortgageforce managing director Robert Clifford says: “Brokers will find generic product advertisements that will be bland. Lender control of advertising will change the relationship greatly – it will look more of a master/servant agency relationship.

“If lenders are morally responsible for brokers&#39 documents and advertisements, then why not go for full control in the form of multi-ties.”

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