The FCA has backed the creation of a broker comparison tool for consumers, developed and hosted by the Single Financial Guidance Body.
Detailed in the Mortgages Market Study Final Report, an FCA working group was set up to support the development of the tool in July 2018, made up of consumer organisations as well as lender and intermediary trade bodies.
The group agreed that the tool should include information on fees, the number of lenders intermediaries place business with, their areas of expertise, as well as adviser certifications and qualifications. It mustn’t benefit larger intermediaries over smaller or specialist ones.
The FCA said: “Current tools are limited in both scope and coverage. Participation is voluntary, so the tools do not cover all intermediaries in the market.
“We want consumers’ initial contact with the mortgages market, when considering a new mortgage or remortgage, to be on an informed basis.
“We want consumers to have a means to access, assess and act on relevant and impartial information on the strengths of different intermediaries when seeking mortgage advice.
“In particular, information about intermediaries’ services should clearly show the extent to which an intermediary uses a broad or narrow range of lenders and products, distinct from the range of products they offer.
“We believe this will incentivise intermediaries to use more lenders. This should drive up quality among intermediaries and improve competition between them (as well as competition between lenders).
“This might also help consumers referred to an intermediary by estate agents and/or developers. Consumers would be better placed to identify whether that intermediary offers the level and quality of service that they want.”
The tool is intended to build on the Single Financial Guidance Body’s existing MAS Retirement Adviser Directory, which helps consumers find financial advisers to help with retirement planning, inheritance tax, equity release, as well as wills and probate.
The creation of the tool is subject to further discussion, refinement and agreement with stakeholders.
The Single Financial Guidance Body was launched at the start of 2019, spun out of the Money Advice Service, The Pensions Advisory Service and Pension Wise.
The body will consult with the FCA, industry and consumer representatives during the second and third quarters of 2019 to establish exactly what information will be presented and in what format.