The PSD report said the proportion of “mortgages sales with advice” has decreased in the last four quarters, from 74% in Q2 2010 to 68% in Q1 2011.
“This is consistent with the observed decline in the relative importance of intermediaries; since they typically sell advice,” said the report.
The FSA did mention that “sales by intermediaries” were very popular before the crisis, in 2005-2008 when the majority of mortgage sales, some 64% were made via intermediaries.
This changed in H2 2008 and the quarters that followed, with the result that now selling via intermediaries is less common making up 47% of sales in Q1 2011.
Since Q2 2010, there has been a decline in the proportion of intermediated sales in the mortgage market from 51% to 47% in Q1 2011.
Since intermediaries are more likely to provide advice, the FSA said it expected a decline in the number of mortgage sales with advice.
Direct sales, on the contrary expanded by 11.9% during the same period.
Andrew Montlake, director at Coreco, said: “It is alarming that the number of mortgage sales taking place with advice has decreased, perhaps as a consequence of some lenders taking a more aggressive approach to direct sales.
“If this were to continue then I would be very worried indeed as I would imagine that if you asked many of those who took out mortgages without advice they would not be aware that no advice was given.
Montlake said that brokers needed a level playing field where advice was consistent whether through an intermediary or direct branch staff.
He added: “Whilst it is easy to say there has been an “observed decline in the relevant importance of intermediaries” in a cold report, the reality is that independent advice has never been so important and I would be surprised if the balance does not start to swing back towards intermediaries over the next couple of years as branches are unable to cope with any growth in demand.”
