Gemma Harle: FCA’s execution-only plan is irresponsible

Ryan Bembridge

May 7, 2019

Gemma Harle, managing director of Intrinsic mortgage network, has slammed the Financial Conduct Authority’s plan to relax rules around execution-only mortgages.

This morning an FCA consultation paper said it planned to remove the detail required on firms’ execution only policies, like an estimate of the amount of execution-only business they anticipate doing, in order to stop it being viewed as inherently riskier.

But Harle (pictured) said: “It seems somewhat irresponsible to relax the rules around execution-only mortgages.

“The industry is multifaceted and the products are complex and there is never a one size fits all mortgage.

“An adviser can help someone balance what might seem cheaper with the benefits of additional features…

“Another important point is that typically lenders do not accept execution-only mortgages from an intermediary, as they want consumers to go directly through them.

“Given intermediaries go across the whole of market, the unintended consequences of trying to increase the number of execution-only mortgages could be that there is less choice for this type of consumer.”

Harle wasn’t negative about every FCA proposal, as she said the regulator was sensible to relax its definition of what constitutes advice to not include guidance tools, which allow customers to search and filter available mortgages.

She also said it wasn’t a bad suggestion to ensure that advisers justify recommending a mortgage that isn’t the cheapest.

However she seemed concerned about the trend of the FCA rolling back on the principles established in the Mortgage Market Review – that the mortgage market should be largely advised.

Harle added: “Considering a mortgage is likely to be the single largest piece of debt someone takes on in their life it seems strange that the FCA, in their consultation paper released today, is seemingly lamenting the fact that this important decision is increasingly being taken with the addition of mortgage advice.

“In fact the take up of advice in this area is thanks to the regulators’ Mortgage Market Review. Before the financial crisis around 70% of new sales were advised, this jumped to 97% post the MMR, which was the intention. Now the regulator looks to be back peddling.

“In some respects its proposals are rational, but there is a real risk that removing the need for advice will be at the detriment to the public.”


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