News Review
Change ahead as AMI and FSA throw curveballs By Sarah Davidson
February saw sweeping changes for the mortgage broker market from the Fi- nancial Services Authority scrapping individual regis- tration to the Association of Mortgage Intermediaries di- vorcing itself from AIFA to stand alone.
The FSA said it remained committed to extending the approved persons regime to those selling mortgages, but given its broader priorities to deliver the UK’s two new reg-
ulatory bodies, it could not deliver the necessary changes before the Financial Conduct Authority is established. The broker community
was angered by the decision. Nigel Stockton, fi nancial services director at Coun- trywide, said: “It appears the FSA have been infl uenced by some lenders who were dragging their heels on the proposal. This is another example of large lenders railroading over consum- er advice to the detriment
of customers.” AMI’s decision to split from the IFA trade association came after nine years as part of AIFA, which announced a loss last year. AMI said it was able to sustain itself fi - nancially as an independent body and has agreed with the board it will focus on the Mortgage Market Review and European Directive this year. Lord Deben will remain as
chairman of AMI and Robert Sinclair will head the organ- isation as director. AMI will
support the requirements of the Association of Finance Brokers. Sinclair said the split was amicable and added: “We have done the preparation work and we know we can deliver a fi nancially stable and robust trade association for mortgage intermediaries which is able to dedicate its time to making sure this part of the industry is ready for the changes which the MMR and the European Mortgage Directive will bring.”
Consumer understanding questioned by FSCP By Sarah Davidson
The Financial Services Con- sumer Panel has said con- sumers can’t be expected to understand complex fi nan- cial services and products should therefore do what consumers “reasonably ex- pect”.
The new Financial Ser- vices Bill being discussed by Parliament at the moment contains a proposal that the new regulator should “have regard”
to the principle
that consumers should take responsibility for their deci- sions.
But the FSCP’s paper ex- plains why it is unreason- able to expect consumers to understand the detail of highly complex fi nancial products and services and the risks for consumers this principle creates. Adam Phillips, chair of the Consumer Panel, admitted consumers need to act “sen- sibly” when making deci-
sions about fi nancial services.
But he added: “All too often the prod- ucts they are being sold are so complex and the risks in- volved so obscure that it is impossible for them to make reasoned decisions. This is why the Panel believes that the new Financial Conduct Authority should be able to make rules to impose fi du-
ciary responsibilities on the industry.” Phillips said given
Adam Phillips consumers,”
the complexity of fi nancial services, knowledge is power. “This power currently resides in the hands of fi rms rather than he added.
“It is time to redress the balance, not to load further responsibility onto consumers.”
6 MORTGAGE INTRODUCER MARCH 2012
www.mortgageintroducer.com
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