The way customers choose their mortgage could be about to change following the Financial Conduct Authority’s (FCA) proposals to its mortgage sales requirements.
Making up one section of the previously published Mortgages Marketing Study, the package of remedies are focused on making the job of linking a customer to their perfect mortgage, that is right for them, a lot easier. However, the FCA have argued that a number of their recommendations may actually hinder buyers from easily finding the right mortgage to suit their needs.
The FCA will look to ensure that any tools that are available to help prospective buyers also offer advice. Currently, any tool enabling customers to search and filter mortgage deals online may help a person find the cheapest deal, but they fail to offer advice or put the mortgage products into context.
Mortgage advisers will now be accountable to explain why they may have omitted certain mortgage products from their suggested list if the deal meets the needs and circumstances of the customer they are working for. Advisers will also be required to explain why cheaper mortgage deals were not considered when they compiled their list of prospective mortgage products.
Among other things the consultation period will also look to improve the standards around execution only policies.
A number of organisations are now geared up to offer their thoughts on how to improve the process that will help consumers find the right mortgage for them. Organisations will now have until July 07 to share their ideas with the FCA before they release their final recommendations and standards later in the year.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
“The mortgage market is working well for most customers, but we have identified some areas where our rules are acting as a barrier to innovation.
“The changes we’ve announced will allow firms to develop products and services which can truly meet the needs of customers.”
Jackie Bennett, Director of Mortgages at industry body UK Finance, commented:
“This should help ensure that firms can easily provide factual information to borrowers who opt to go through the execution-only route, helping them to choose or switch product quickly and efficiently. It will also support continued innovation, particularly in digital channels.
“The overwhelming majority of new loans are likely to continue being sold under an advised process, during which customers take part in a lengthy interview with the onus being on the lender or adviser to ensure that the mortgage is suitable for the borrower’s needs.
“UK Finance will be responding to this consultation in due course and will continue working with the FCA to make it easier for customers to choose the right product for them.”
Do you think these improved standards will make the process of finding the right mortgage easier for buyers?
One Response
Should conveyancing comparison also be required to offer advice?