The Intermediary – September 2025 - Flipbook - Page 86
B RO K E R B U S I N E S S
Opinion
Opportunity for
advisers or a
threat to advice?
A
s we get closer to
the 19th September
deadline date for
responses to the
Financial Conduct
Authority’s (FCA)
DP 25/2 on the future of the mortgage
market, I have been revisiting the
paper and seeking to glean from it
some information – or indeed a thread
– on what the regulator sees as the
future of advice and technology’s role
in it.
Of course, perhaps unsurprisingly,
there is a lot wrien in the DP about
artificial intelligence (AI) usage, but
this is from the perspective of the
regulator, not firms active within
the industry, and that is a major –
potential – point of difference.
What struck me aer a re-read
is how frequently the FCA refers to
‘firms’ telling it how much they want
to innovate with AI-assisted sales
journeys, but it never tells us who
these firms are. You, however, can
hazard a guess.
If advisers represent a community
where more than 90% of sales are
already advised, and where AI is
much more likely to be embraced as
a time-saver and compliance helper
rather than a wholesale replacement
for professional judgement, then
it’s hard to believe we’re the ones
pushing hardest for AI to ‘disrupt’ the
advice process.
Lenders, on the other hand, have
every incentive. The removal of
the ‘interaction advice trigger’ this
summer is already a case in point.
Put those two together – lender
appetite for slicker direct journeys,
and regulatory encouragement or
capitulation for greater executiononly usage – and suddenly advisers
find themselves in a very different
place. One where AI is not necessarily
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The Intermediary | September 2025
a neutral ‘efficiency tool’ for advisers,
but a lever for lenders to grow their
direct business under the reassuring
label of ‘innovation’.
That is what should be giving our
sector pause for thought. Because if
the FCA chooses to interpret ‘AI usage’
in this way, then we should all expect
far more aggressive pushes by lenders
for direct business.
Execution-only
Of course, the FCA is right to
recognise that AI can bring benefits.
Automated document handling,
streamlined fact-finding, improved
compliance record-keeping,
personalised communications that
help clients actually understand their
mortgage choice, for example.
These free advisers up to do what
they do best: interpret, contextualise,
and deliver holistic advice that meets
Consumer Duty requirements in full.
But those adviser-centric benefits
are not what the DP lingers on.
Instead, the language is about enabling
‘AI-assisted advice and sales’, about
improving eligibility checks and
acceptance likelihood.
On one level, there’s nothing wrong
with that – consumers of course
want clarity early in the process. But
dig a lile deeper and the emphasis
feels less about adviser support and
more about building confidence that
execution-only can be done safely.
That is not a direction of travel the
advice profession should simply
nod through.
If execution-only journeys are
made ‘smoother’ and ‘lower risk’ for
lenders because AI is deemed enough
to run the checks, then the value
of professional advice risks being
diluted. Worse, consumers may be led
to believe that an algorithm’s approval
is equivalent to human judgement
BOB HUNT
is chief executive at Paradigm
Mortgage Services
about what is suitable for their
unique circumstances. We know that
isn’t true.
The first step is to challenge the
FCA’s narrative that ‘firms’ want this
shi. Advisers must make clear that
when we talk about AI, we mean using
it to support the advice process, not
to bypass it. We need to ensure the
regulator understands the distinction
between AI as an adviser-enabler and
AI as an execution-only escalator.
That’s why initiatives like our
recently-launched survey on AI
are important. We want to capture
how advisers are actually using – or
wanting to use – these technologies.
We are seeking views on the
opportunities, the challenges, and
the potential risks. Crucially, it’s
about hearing the adviser’s voice, not
just accepting what the regulator or
lenders tell us is happening, or what
is required.
This maers because if advisers
do not articulate their perspective,
the debate risks being shaped
exclusively by those who benefit
most from loosening the boundaries
around advice.
Advisers’ competitive strength lies
in quality of service, holistic planning,
and trust. If regulation shis to make
it easier for consumers to bypass
advice under the comforting banner
of AI – and we’ve already seen this
happen – then the adviser community
could find itself playing catch-up.
As the deadline for responses to
the DP approaches, we would urge
advisers to engage both with the FCA’s
DP and our survey. One speaks to the
regulator, the other ensures the broker
community itself has the data and
insight to push back against any onesided framing of AI’s role. ●
