Brokers switching to non-advised status
John Mawdsley, director of The Mortgage Partnership, told Mortgage Introducer he has been in contact with a number of brokers who feel they may be forced to switch from advised to non-advised status as the costs of regulation and the fear of more customer complaints becomes an increasing worry, particularly among the smaller broker firms.
He said: “This desire to switch to non-advised, where you only give the client information based on scripted questions rather than providing advice, is becoming more apparent. Because of the responsibility of giving advice, the broker is more susceptible to customer complaints and added costs.”
Although Mawdsley said the customer does not necessarily get a worse service or level of choice from a non-advised broker, he believes it could still damage the market. “Essentially, it brings up the question of why a client goes to a broker in the first place. Is it for information or is it for advice?”
Mike Fitzgerald, sales director at Brentchase Financial Services, said two advisers at his firm had recently switched to non-advised status because regulation had become too much for them but added: “This is just natural wastage. Some will rise to the top while others will have suffered. But if it gets any worse, it will become detrimental to the public.”
Tony Jones, managing director of Pink Home Loans, commented: “It’s a shame if some brokers are opting out of advised status. I’m sure it’s not what the FSA intended. But some intermediaries are throwing up their arms as they can’t deal with the risks and costs. Let’s hope it doesn’t result in more brokers leaving the industry altogether.”