The letter, from Oliver Page (MRGD firms) and David Strachan (RFD firms), explains that the FSA has been told of instances where product providers have paid to appear on an intermediary’s panel or recommended list.
The letter warns: “We consider such payments would not be consistent with the standards of conduct for firms – irrespective of whether they will be whole of market or multi-tied.”
FSA spokesman Robin Gordon-Walker explained: “Firms could technically accept inducements prior to ‘Mortgage Day’, but if it was judged to have an effect post-regulation then it would be deemed illegal.”
The RFD covers IFA, insurance and mortgage networks and firms, while banks and building societies are covered by MRGD.
Bill Warren, network director at the Complete Network and former national compliance manager at the MCCB, said the FSA letter should be seen as “warning shot”.
“The FSA clearly believes that some networks are attempting to tie-up deals before they come under regulation in October,” he explained. “I think those who have taken inducements will have to return them or face serious sanctions at a later date from the FSA.”
Sally Laker, managing director of Mortgage Intelligence, commented: “The letter relates to the entire financial services industry not just the mortgage industry.”
