A broker said he had been advised by the FSA he would have to pay just under £800 to amend his authorisation if he decided to introduce GI cases to a third party.
But when he made further enquiries, he was told no amendment was necessary.
Steve Herbert, broker at Select Mortgages & Loans, explained: “We decided that with all of the compliance issues we did not want to sell any insurances but refer enquiries to an IFA. I telephoned the FSA for guidance.
“The first call resulted in me being advised to apply for an amendment to my authority at a cost of £750. Can you imagine if I charged £750 to amend an application?
“After speaking with another mortgage broker and IFA I rang the FSA again and asked the same question, this time being told that there is no need to change authority just to introduce to an IFA, as long as I have the clients authority and am not involved in the sales process.
“I would like to know what the true answer is. If staff in the FSA’s variation of authority offices don’t even know what’s going on, what chance have we got?”
Herbert added that on making a third enquiry he was told to apply for a variation to his licence to also cover insurance at a cost of £600 and his PII cover also had to cover this, despite not being involved in the sale or advice.
He added: “It all looks as if the words ‘advice’ and ‘service’ are being removed from the mortgage dictionary by the FSA.”
Robin Gordon-Walker, spokesman at the FSA, said: “Any assistance in the sale of general insurance would need a variation of permission.
“The trouble with these sorts of enquiries is that the definition of what the broker wants to do and what his status is, is not always clear.”
