At the Mortgage Business Expo, FSA director of small firms and contact Lesley Titcomb told brokers there was a long way to go before the regulator is completely happy that all mortgage advisers are covering the basics for regulation.
She said: “There is nothing wrong with looking to diversify income but I do not want to see people lose their focus on regulatory responsibilities. We are concerned where firms switch to selling products outside their area of expertise and to selling riskier products.
“In our project looking at the quality of advice processes in intermediaries earlier this year, our findings were disappointing. Over three-quarters of firms we contacted did not have robust processes throughout the areas of their business associated with giving advice. My message is to make sure that you have the basics right before you expand into new areas.”
Telos Solutions project director for mortgage compliance Richard Farr says: “It is ironic that we are here at an event about diversification and the FSA are saying 75 per cent of brokers have not got the basics right. It is a massive message.”