The Intermediary – June 2025 - Flipbook - Page 28
discussion about changing the product, the
advice trigger needs to be pulled.”
While the proposals may look positive on
paper, Singh warns: “The worry is not just what
On the other hand, some in the industry see
these proposals mean in theory, but what they
potential benefits. Haq observes that many firms
could signal in practice. If the journey to advice
are adapting with clearer customer journeys and
has camouflage netting thrown across its path,
stronger internal processes.
Michael Shand, managing principal at Capco,
describes the FCA’s review as a positive step for
consumers with simple needs: “The FCA’s review
then over time the consumer experience may
regress to one of faceless processes, low-bar
suitability, and higher lifetime costs.”
He adds that the ripple effects could impact
into mortgage rules is a welcome step, making it
the advice sector, with fewer mortgage leads,
simpler for many customers to switch to better
reduced protection uptake, and erosion of
mortgage deals.
recurring client relationships.
"For those with straightforward, low-risk
Operationally, firms are feeling the pressure.
circumstances, this could mean real savings
Haq notes that complying with new regulatory
and a much smoother experience. However,
standards always requires careful planning and
simplification must not come at the expense of
system updates.
safeguarding more vulnerable customers or those
navigating complex mortgages.”
For lenders, the reforms are seen as “absolutely
positive,” according to Hutchins, who goes on
Davies underlines that lenders need time to
make strategic decisions and train staff, warning
that borrowers may expect new processes before
lenders are fully prepared.
p
to highlight the flexibility and optional
nature of the changes.
The key challenge will be ensuring that
innovation and efficiency do not leave
vulnerable consumers behind.
Davies says: “In order to comply with
the Consumer Duty, lenders will always
need to satisfy themselves that a borrower
will be able to meet the higher payments
associated with a term reduction.
"It is not clear how a lender could do
this properly without undertaking an
affordability assessment.”
She cautions that removing existing
protections risks confusing what has
become a clear demarcation for lenders.
Shand adds: “Firms must ensure
their systems are designed to support
all customers, including those who may
struggle with digital access, confidence,
or understanding.”
Hutchins agrees: “It’s really important
that all regulators work together and
discuss the changes that they’re looking
to make, to make sure that they’re
done correctly, and to consider any
unintended consequences.”
Navigating uncertainty
As the sector digests the outcome of
CP25/11, firms will be reviewing their
processes to determine where advice
remains essential, and where streamlined
digital journeys might serve consumers
better. The Consumer Duty remains a
safeguard, demanding good outcomes
for all, whether or not they have the
confidence to self-serve.
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The Intermediary | June 2025
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