The Financial Conduct Authority (FCA) is rejecting suggestions from some within the industry that the new mortgage advice rules it issued recently will force advisors to focus too much on prices.
The FCA released its new mortgage advice sector rules at the end of last month, with these being intended to address concerns generated after the Mortgage https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Study from the FCA found that many borrowers were paying too high a price for their loans. The revised rules will require mortgage advisors to offer records detailing why they did not guide a client towards a lower-cost mortgage option, when that is applicable.
However, this has led some industry observers to suggest that advisors will feel obligated to push clients towards the cheapest possible mortgage deal to avoid falling foul of the new rules – even if that is not the one that best meets the needs of the client.
The FCA has responded by stating that recommending a mortgage that is most suitable for each individual client should still be the first priority for an advisor. It went on to argue that the rules about pricing only apply when there are several mortgage loans available that offer the same features but at different prices. In that situation, an advisor is expected to steer their client towards the cheapest one.
When it issued its new rules, the FCA also stated that there were “relatively few” complaints about the mortgage advice sector in the UK.
Alongside CeMAP training, these new regulations should help advisors provide the best possible service.