View more on these topics

Robert Sinclair: Euro mortgage rules bring new world of pain


Good regulation and supervision should be all about “no surprises”. The industry should be aware of what is coming and respon-sible firms been given good briefings on what is expected of them.

Imagine the surprise for many when Lynda Blackwell, manager of mortgage policy at the FCA, spoke at Financial Services Expo a couple of weeks ago and set out the likely impacts of the new European Mortgage Directive. Most in the room were taken aback by the likely scale and reach of the changes being required should the directive be adopted by the European Parliament and Council before the end of the year.

When the FSA decided to push ahead with its Mortgage Market Review proposals in 2012, with implementation on 26 April, 2014, the surrounding communications gave a clear impression that these new rules were “directive-proof”.

It now looks as though the benefits of reduced written disclosures will be rolled back and having just completed rewrites to software to produce MMR-compliant KFIs, a whole new 18-month exercise will be needed to meet the directive’s requirements.

In addition, how we introduce binding offers and consideration periods into a process which is already cumbersome for the consumer will take much debate. This is without the complexities of new Annual Percentage Rate of Charge calculations and disclosure of a second version should any initial rate be for less than five years.

While we have no choice in implem-enting the spirit and letter of the directive, we did have choice on the MMR and the industry has the right to expect better.

If this is bad for the first mortgage world, the issues for those in the second charge industry are more complex. They face migration to FCA control from the OFT, into an interim regime, and no certainty about their conduct rules until the dust settles on any directive impacts.

Moving from the certainty of a statutory framework with tested case law to an unknown regulatory regime which is certain to change is not the kind of consistency that assists good firms to plan and grow at a time when the economy needs funding. By the same token, broker firms should have the same relationship with their lender partners. This “no surprises” approach should be there too.

I am becoming more concerned that a lender can question the quality of a firm’s business, remove them from panel and then mystically other lenders decide to with- draw them from panel.

Clearly, if there has been fraud which the broker could reasonably have known, then there is no argument. But too often recently I am seeing lenders adopt the Wheatley-esque shoot-first- ask-questions-after approach. And when later it is proved that there was reasonable doubt, I am concerned that the doors back to panel remain closed.

Once a broker has been removed and they honestly answer their regulator’s enquiry, this brings more enquiry, action and costs that the average broker cannot survive. Fraud is a bad thing and as an industry we must act with vigour to get rid of it but we need to remember intermediaries are paid to introduce business, not conduct lenders’ fraud checks.

Robert Sinclair is chief executive of the Association of Mortgage Intermediaries


MM Creche

“will you be quiet Thomas!…..”

“WILL YOU BE QUIET THOMAS! Sorry…not you.”  ABI assistant communications director Liz Hickey attempts to quieten her son while speaking to an MM hack with the same name. “32 per cent of platform assets are controlled by men called David.” The Platforum managing director Holly Mackay outlines the headline stat of her new RDR report […]


Zurich to offer investment-linked protection on platform

Zurich is to launch a range of investment-linked protection products on its adviser platform early next year. Speaking at The Platforum annual conference in London last week, Zurich UK Life chief executive Gary Shaughnessy said the insurer had developed the range following market research carried out at adviser seminars. He said: “Many advisers separate out investment […]


Pensions Policy Institute: Compulsion may be needed to boost savings

The Government could be forced to reconsider compulsory pension saving after an independent report found average earners will have less than a 50/50 chance of achieving a decent retirement income under automatic enrolment. A new report by independent think tank the Pensions Policy Institute, published this week, examines the likelihood of someone who pays the […]


Platforms say self-serve models can fight D2C growth

Platforms have argued advisers must look to adopting models where clients can self-serve or risk losing clients to direct platforms. Speaking at The Platforum annual conference in London last week, Axa Wealth managing director David Thompson said uptake of its non-advised platform Axa Self Investor had been “limited” so far. Axa launched its Self Investor platform […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm