The Intermediary – August 2025 - Flipbook - Page 18
RESIDENTIAL
Opinion
Is the regulator
devaluing advice?
H
ere at Equifinance,
we are totally
commied to the
intermediary sector
as our distribution
channel. As a result
of the relationships we have put
together over time, our business has
flourished. The professionalism and
support of our partners has meant that
we have built up a strong reserve of
trust over the quality – and quantity –
of the applications we receive.
While it is early days, I am not sure
whether fellow mortgage practitioners
have had a chance yet to digest the
news that the regulator is considering
limiting the requirement to give
advice during client conversations
in favour of more execution-only
solutions.
Under consultation paper (CP25/11),
the Financial Conduct Authority
(FCA) would seem to be flagging the
possibility of undoing and unpicking
its existing guidance on mortgage
advice, which culminated in the
adoption of Consumer Duty just last
year, and its insistence on making sure
that properly considered customer
outcomes are the ultimate focus for
all advisers.
The layers of regulation – from
Treating Customers Fairly (TCF) to
Consumer Duty – have reinforced
the importance of clients receiving
proper advice based around a
comprehensive fact-find, followed
by a recommendation predicated on
extensive research.
Doesn’t it seem an odd time for
the regulator to be talking about the
possibility of extending the use of
execution-only as a viable alternative
to proper advice? The whole thrust
of advice has been to help ensure that
consumers have protection from the
lazy option of ‘selling’ a single product
or one from a suite of products.
Everything about advice has been
geared to trying to reach an equitable
lending solution for clients based on
16
The Intermediary | August 2025
the gathering of their personal and
financial details.
Execution-only flies in the face
of giving customers a professional
service, and definitely contradicts the
canon of consumer protection which
has been built up over many years.
If adopted, the losers would
be the customers who continue
to rely on advice and receiving a
recommendation from a whole-ofmarket practitioner. Being le to
navigate everything from affordability
and lender criteria, as well as finding
out about legal representation and
the whole valuation process, could
potentially put clients at risk through
lack of vital information.
Of course, it can be argued that not
everyone requires advice. Those with a
greater knowledge of finance and who
are aware of the potential pitfalls do
not necessarily require the help. But,
for those of us wanting to understand
the ins and outs of mortgage finance,
we need to know that the multitude
of possible solutions have been
sied through to ensure that any
recommendation is a valid choice that
meets our particular requirements.
The regulator is seeking feedback
from the industry based on a desire
to help encourage consumer choice
and greater convenience. A laudable
Proper advice is key to consumer safety
LAURA THOMAS
is regional sales manager
at Equifinance
Advisers should pat
themselves on the back for
giving peace of mind to so
many new borrowers”
ambition, but while this is just a
consultation, there is no indication
that this more than an old fashioned
fishing expedition to get the result that
they want.
If I was being cynical, and
execution-only was expanded, the
main winners would be those high
street lenders that have always disliked
their reliance on intermediary
business because procuration fees
cut into profits. An expansion of
execution-only would mean an
increase in direct business from
consumers and a reduction in the cost
of procuration fees.
I think that everyone would agree
that the mortgage process can be a long
one. However, how much of that is
down to money laundering legislation
and lender caution in assessing
individual risk from clients?
The consultation paper states that
97% of new mortgages have been
advised since 2015, which in my eyes
is something to be proud of. Advisers
should pat themselves on the back
for giving peace of mind to so many
new borrowers.
We don’t want to see the positive
results of proper qualified advice
diluted in favour of what effectively
is a cut price service under
execution-only. ●
