With the Financial Services Authority (FSA) admitting that 1.4 million borrowers will be coming to the end of their fixed rate deal in 2008, the CML, in conjunction with the Money Advice Trust, launched an advice service designed to help these borrowers. However the initiative has been criticised for ignoring the intermediary role.
The service, announced in a White Paper on the same day as the Chancellor’s Budget, referred borrowers who were coming to the end of the fixed rate deal to a number of independent advice centres including: Citizens Advice Burea, National Debtline, Shelter and the Consumer Credit Counselling Service. However, it failed to mention the role that brokers could play in advising worried borrowers.
The move was heralded by the government, and an Early Day Motion, announced by Ian McCartney, said: “This House applauds the joint initiative of the Money Advice Trust and the CML in disseminating free, early advice to these borrowers and highlighting key sources of independent and free confidential advice.”
However, Alan Lakey, senior partner at Highclere Financial Services, claimed the move was poorly thought out and executed.
He said: “The move seems to suggest that any borrower coming to the end of their fixed rate will automatically be in financial trouble. The first port of call should be a broker, who can source from the whole of market. Citizens Advice and other organisations should be seen as a last resort.”
A spokesperson for the CML said: “The paper is in conjunction with the Money Advice Trust and we widely acknowledge the role that brokers can play in helping borrowers.”
