Speaking at the Association of Short Term Lenders Conference 2015 yesterday the FCA's mortgage sector technical specialist Lorna O’Brien was talking through the FCA review ‘Embedding the Mortgage Market Review: Advice and Distribution’, which found that 3% of sales from advisers resulted in an unsuitable recommendation, 59% were suitable, but in 38% of cases the regulator was unable to determine whether the mortgage advice was suitable or not.
O’Brien said: “Some firms placed a heavy reliance on point of sale technology application systems which actually didn’t give them any flexibility to consider customers’ specific needs or to apply judgement.
“Some firms delivered advice with little or no structure, so advisers didn’t have sufficient understanding of the customers’ needs and circumstances on which to base their recommendations.
“The best performing firms in our sample, which did include both lenders and intermediaries, demonstrated that it is possible to do both and strike a balance using structured processes so that advisers could obtain relevant information about customers’ needs but also to allow them to apply their judgement and expertise to provide suitable recommendations.”
O’Brien added: “We have asked some of the firms to make specific improvements and we will be working with the industry to further help ensure firms are delivering suitable recommendations.”
