“Close up and find another career”

Six in 10 brokers want more information on Consumer Duty from financial providers to help them with the imminent changes, according to Hodge.

Brokers speaking to Mortgage Introducer, however, have strongly conflicting views on the matter, with some agreeing to feeling overwhelmed by the looming changes, and others believing those who are struggling should ‘close up shop’.

So, where are these passionate views coming from?

No need for more information

Gary Bush (pictured), financial adviser at Mortgage Shop, said any adviser in July 2023 suggesting that they need more information about the new regulation relating to Consumer Duty needs to ‘close up and find another career.’

“Professional advice firms have all been fully engaged with the Financial Conduct Authority’s (FCA) new benchmark for over a year, made significant changes to their processes/procedures, and are looking at the August 1 commencement date as a new dawn for the UK financial services industry,” Bush said.

He added that firms have had the opportunity to sit in a room with the FCA in order to listen and probe the new criteria with the regulator, which is what he believes firms who take their position seriously have done.

“I am praying that this data from Hodge is quite historic and that these six out of 10 are now on the right page with this; if not, I see a hell of a lot of pain coming their way,” Bush added.

Joe Stallard, director and adviser at House and Holiday Home Mortgages, said Consumer Duty has been on the horizon for a while, so he believes the changes should not come as a surprise. He added that it is simply an adjustment in the regulatory landscape to encourage everyone in financial services to make sure they have got a customer-centric attitude, and focus on putting the needs of their customers first.

Austyn Johnson, founder at Mortgages For Actors, said, as professionals, brokers should have been delivering the type of service Consumer Duty demands from day one.

“The issue has been, over the years, greedy people and bad brokers have tried to rush everything, with their only regard being for monetary gain,” he said.

Johnson believes that the initial training a broker must undergo should include grading on their customer service capabilities too.

“I was told to treat people how you would want your elderly mother to be treated; you would not dream of skipping over things, or not allowing some extra time for your mother, so why do it to someone else,” Johnson said.

Overwhelming and confusing

Michelle Lawson, director at Lawson Financial, said there has been a lot of information from various sources but, in truth, she has found it all quite overwhelming, and, at points, confusing.

“The FCA Live & Local event was particularly helpful; the main issue, as always with the FCA, is everything is down to interpretation, and when they are wanting us to be clear and concise, their very own guidance, website and handbook is one of the most confusing and jargon-loaded I have seen,” she said.

Lawson added that the status of the mortgage market in recent years has put significant pressure on brokers regarding the impending changes.

“We have been trying to assess our firms while juggling the normal business requirements and volumes, along with last minute rate pulls at various times,” Lawson said.

Stephen Perkins, managing director at Yellow Brick Mortgages, said, like always, the FCA states some high-level principles, which have plenty of merit, but “lack everyday guidance on their implementation.” Good networks and mortgage clubs dissect this information, Perkins said, and translate it into usable guides for their members.

“However, that still leaves many, mostly directly authorised firms, unsure of exactly what Consumer Duty means for them in their day-to-day application,” he added.

Scott Taylor-Barr, meanwhile, financial adviser at Barnsdale Financial Management, said there is a huge volume of information available to brokers around Consumer Duty. However, he believes the biggest challenge is finding a reliable source that is not using it to push their own products or agenda in some way.

“Our trade body, The Association of Mortgage Intermediaries (AMI), has produced some excellent and easy-to-understand Consumer Duty factsheets for its members, which are ideal for what most brokers need,” he said.

Consumer Duty is a sea-change in the way the regulator expects brokers to behave, or rather the way advisers record how they behave, Taylor-Barr said, as the vast majority of brokers always had the consumer at the centre of what they do.

Do you believe brokers want more information on the impending changes from Consumer Duty? Let us know in the comment section below.