LETTERS letters STAR LETTER


Lenders treat regulatory requirements with disdain


Marketwatch columnist Andrew Montlake was right last week to name Michael Bolton as Villain Of The Week for his comments on interest-only and for suggesting brokers should be squeezed out of the market. But Bolton brought attention to one of the most shameful


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outcomes of the banking crisis – brokers advising on many lenders’ products without receiving a fee for effectively a product sale on behalf of lenders such as HSBC, Yorkshire Building Society, Co-operative Bank and their ilk. Conscientious brokers are torn between providing whole-of-market advice and whole-of-market advice. No, that is not a typo, just a sad commentary on the Financial Services Authority’s failure to define what constitutes representative whole of market and what is a fully independent offering. Add the failure to impose


Lenders have been left to their own devices for too long and get away with far too much in terms of seeing customers as sales targets


Mortgage Conduct of Business rules for non-advised sales and to supervise lenders enough to control non-advised mortgage sales, and you effectively have an unregulated market.


No wonder lenders are kicking against near-compulsory


advice. They have been left to their own devices for too long and get away with far too much in terms of seeing customers as sales targets. Bolton highlighted the disdain with which lenders have


treated the spirit and the letter of regulatory requirements. The latest interest-only developments make me believe the mention of Treating Customers Fairly provokes merriment in lender circles. It is embarrassing to be promoting the organisations responsible for such acts and even more embarrassing to be regulated by the FSA which has failed to get even the basic things right.


STUART DUNCAN THE PERSONAL MORTGAGE SERVICE


www.mortgagestrategy.co.uk


mortgagestrategy welcomes readers’ letters intended for publication. Letters should be sent to: The Editor, Mortgage Strategy, 79 Wells Street, London W1T 3QN. Letters can also be emailed to mortgage.strategy@centaur.co.uk


Arguments to keep non-advised sales do not make sense


It comes as no surprise that the Council of Mortgage Lenders and the Building Societies Association have voiced their opposition to the removal of non-advised sales, but what is surprising is their feeble arguments in support of its retention. The BSA says there is a risk consumers become less engaged if they are provided with advice they don’t want or need. What are they talking about? Why is there a risk of being provided with advice? If consumers don’t want advice they don’t have to see an adviser and can go via a non-interactive route instead. For those people who just want


information, there are plenty of channels available. The CML says that the fully


advised route will deter new product providers from entering into the market. This does not make sense as


new providers have historically used intermediaries to sell products and grow market share quite successfully. The CML also estimates an


advised sale can take up to 1.7 hours longer than a non-advised one.


Since the essential difference


between the two types is whether a recommendation is made or not, this figure seems absurdly high. Indeed, I would suggest 1.7 hours is sufficient time to conduct an advised sale in its entirety. I don’t think either the CML or BSA have taken on board what the


FSA is saying – it’s virtually impossible to steer a sale down a non-advised route. It’s likely advice has been given


before the advised/non-advised sale paths diverge. Regardless of what they are told, consumers will invariably believe advice has been given.


Since these proposals are not


being introduced in the short term, lenders should take the opportunity to retrain their staff and accept responsibilities that come with advised sales.


ROGER SNODIN RS MORTGAGE CONSULTANCY


The only people who think advice is vital are intermediaries


The comments left in response to the CML’s Mortgage Market Review feedback on Mortgage Strategy Onlinewere laughable. Most people are not interested


in getting advice. Brokers are protesting simply to ensure the process is as complex as possible – that way they hope to ring-fence people and justify their existence. The sooner brokers realise they


only exist because there will always be a group of consumers who will use them because they can’t be bothered to do it themselves, the world will be a better place. Also, when whining about direct


deals, think about this. Brokers do not attract Mr and Mrs Squeaky Clean in the main. Instead it’s those who either can’t be bothered to do it themselves or those who have an issue with their status.


18


MORTGAGE STRATEGY April 9, 2012


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