The Building Societies Association has criticised the mortgage market review’s stance on full advice as being too focused on brokers, with lenders an afterthought.
It warns that there could be a risk that consumers may become less engaged if they are forced to take advice even if they do not require it and pay less attention and have less interest in the mortgage process on the assumption that they will be provided the best mortgage for their circumstances.
The trade body states: “This is a criticism we raised in our response to CP 10/28 and it is disappointing that this has not been taken on board. Of particular concern is the lack of regard for lenders with a limited product range, where advice would be inappropriate and impractical.”
“At a time when the government is implementing major reforms through the Universal Credit regime with the objective of putting consumers in control of their finances, this proposal seems to be at odds with the government’s policy.
It has also criticised the FSA’s stance on advice as too product focused and risks further reducing choice for consumers.
The BSA was hoping that the FSA would mortgage advice and selling to move away from being solely focused on recommending or providing information on a product, to a more holistic financial advice and information approach.
By moving to a fully advised market it says the FSA risks making the process of getting a mortgage more product focused, further reducing the choice for the consumer as to how they manage their personal circumstances.