The Financial Conduct Authority’s (FCA) intention to introduce a broker assessment/comparison tool for consumers is wrought with difficulties and could be “anti-competitive”, according to a number of trade body representatives.
The FCA’s Mortgage Market Study Interim Report, published earlier on in the year, proposed to deliver a broker comparison tool to rate advisory firms on a number of measures, allowing consumers to compare the quality and services of the firms.
Robert Sinclair of AMI outlined at a previous FSE London seminar session how AMI is involved in a working party with the FCA which is working on a way to deliver such a tool. However, he did admit that when it came to the ‘quality measures’ that would be used to distinguish one firm from another, the working party was “struggling”.
“If you’re comparing based on the number of complaints that a firm receives then this is just too obtuse,” he said. “For instance, only five advisory firms ever appear in the Ombudsman complaints data because they are the only ones that get enough complaints to make that list,” he said.
IMLA Kate Davies also expressed concern about how effective the tool would be, stating that it could be “over-engineered horribly”.
Davies Added: “You could simply throw too much information at a consumer, which they might not understand. Our view is that you should leave it to brokers to sell themselves. There is a danger of ‘sledgehammers’ and ‘nuts’ with this one.”
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