The Financial Conduct Authority (FCA) has today published proposals for changes to its mortgage sales requirements, allowing consumers more choice when taking out a mortgage.
The proposals are one part of a package of remedies from the Mortgages Market Study, published earlier this year, which has been designed to encourage innovation and make it easier for customers to find the most suitable mortgage.
In its study, the regulator identified a number of ways in which its advice rules act as a barrier to the development of new tools to help customers choose and purchase a mortgage and the consultation today is intended to address those issues.
Commenting, FCA executive director of strategy and completion Christopher Woolard said: “The mortgage market is working well for most customers but we have identified some areas where our rules are acting as a barrier to innovation. The changes we’ve announced today will allow firms to develop products and services which can truly meet the needs of customers.”
One of the proposed changes will make it clearer to consumers that the tools allowed them to search and filter available mortgages are not necessarily giving advice, while also emphasising that some forms of interaction, such as firms assisting consumers with their applications, do not require advice.
Furthermore, where a mortgage adviser recommends a mortgage that has not been highlighted as the cheapest option that meets the customer’s needs and circumstances, they will now be required to explain why any cheaper mortgage has not been recommended.
The regulator is also making changes to the standards surrounding execution only policies.
The new rules will be consulted on until 7 July 2019 and the FCA will publish its feedback and final rules around the end of the year.
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