In recent years, the pendulum has been known to swing in favour of mortgage lenders as opposed to mortgage advisors, because in some cases, mortgage lenders have favoured branches by making available certain direct products or deals that mortgage brokers did not have access to.
Once you pass your CeMAP exam and start working as a mortgage advisor, it is important to be able to find and offer the best deals to your clients and whether or not you were obliged to recommend specific direct products to clients that you did not have access to offer has been a grey area in the past.
This week however, the Financial Services Authority (FSA) has confirmed to the Association of Mortgage Intermediaries (AMI) that mortgage brokers do not have to recommend particular direct products to their clients.
AMI confirmed that the FSA does not expect mortgage brokers to recommend any lenders or particular products that they are unable to access, and has also outlined this point amongst other issues in a note to its members. This note is being made available to the whole industry.
The Directory General of AMI, Chris Cummings, said:
“We have been in negotiation with lenders, lender trade bodies, and regulators during the recent difficult period and we are grateful for this clarification from the FSA. Much of our work has necessarily been behind the scenes but members will know it is better for their trade body to be effective than simply to be loud.”
According to the AMI, the price differential between mortgage broker and lender branch deals has narrowed and in some cases favour mortgage brokers again, which is great news for those about to sit their CeMAP exam or are considering taking a CeMAP course to qualify as a mortgage advisor.
The industry body also claims that the mortgage lender pricing strategy in favouring their own branches does not seem to have worked. Recent intermediary business figures show an increase in the last year to date. AMI is soon to publish a report on lender pricing activity.
Cummings commented further:
“Across the market, the differential between branch and intermediary offers has narrowed considerably – and in some cases favours the intermediary again. These may be early indications but they are welcome and we will be monitoring the pricing position day-by-day. Our stakes in the ground work will provide an accurate record of recent events, which members can call upon in case of complaints in the years ahead. However, firms will need to keep their own client specific records, particularly with regard to advice relating to the unusual market conditions under which they are operating.”