The reviews, announced by FSA managing director Clive Briault over the last year, will investigate the effectiveness of the regimes, focusing initially on how far the FSA conduct of business requirements for mortgage and GI firms are delivering the intended outcomes for consumers.
The FSA has identified disclosure requirements and advice and selling standards as key areas within both the mortgage and GI regimes where it plans to undertake consumer research.
The reviews will employ a variety of different tools to test the effectiveness of the regimes. The review teams will analyse statistical information, including regulatory returns, and market and economic data such as changes in prices and charges.
There will also be mystery shopping to test if consumers are clear whether a sale is advised or non-advised and whether suitable mortgage and GI recommendations are being made.
Dan Waters, director of retail policy division at the FSA, said: “Naturally we recognise it is still early days and we have to be realistic about the timescales in which the various objectives of the new regime may be achieved. That’s why the reviews are rolling programmes which will measure the outcomes of the regimes in stages.”
Tony Jones, managing director of Pink Home Loans, commented: “It’s encouraging the FSA is continuing to carry out these reviews and progress is definitely being made in the right direction especially among intermediaries. Though there must be a cost-benefit analysis as it is important that the advantages outweigh the regulatory costs and the FSA still has a lot of work to do to fulfil its objectives.”
