Trade body UK Finance has praised the Financial Conduct Authority for attempting to provide clarity on the boundary between execution-only and mortgage advice.
The FCA launched a consultation paper this morning, which proposed making it clear that tools which allow customers to search and filter available mortgages may not constitute giving advice.
It also unveiled plans to remove the detail required on firms’ execution only policies, like an estimate of the amount of execution-only business they anticipate doing.
Jackie Bennett, director of mortgages at UK Finance, said: “The FCA’s proposals provide helpful clarity on the boundary between execution-only sales channels and mortgage advice.
“This should help ensure that firms can easily provide factual information to borrowers who opt to go through the execution-only route, helping them to choose or switch product quickly and efficiently. It will also support continued innovation, particularly in digital channels.
“The overwhelming majority of new loans are likely to continue being sold under an advised process, during which customers take part in a lengthy interview with the onus being on the lender or adviser to ensure that the mortgage is suitable for the borrower’s needs.
“UK Finance will be responding to this consultation in due course and will continue working with the FCA to make it easier for customers to choose the right product for them.”