While progress had been made, the regulator emphasised in particular that a significant number of mortgage intermediaries had failed to gather enough relevant information about their customers to allow them to make suitable recommendations.
Analysing 75 interviews to check whether firms gave appropriate advice and information, the FSA found 60 per cent failed to ask if the client was eligible for other types of benefit, 45 per cent did not ask about other savings or investments, and 44 per cent did not ask about the client’s preference for their estate.
The regulator also noted that 44 per cent failed to provide the customer with an Initial Disclosure Document (IDD). This was down from 59 per cent in the first wave of mystery shops, though fewer adviser firms were questioned during that period.
The FSA also cited an apparent reluctance among intermediaries to discuss the eventual poor health and death of the client and their spouse and how illness or residential care would affect their lifetime mortgage product. Of the advisers mystery shopped, 51 per cent failed to ask about the client’s state of health and life expectancy.
Robin Gordon-Walker, spokesman for the FSA, said: “These figures support the findings we released in July, showing that while some firms are getting it right, some aren’t. More work needs to be done.”
John King, chairman of Safe Home Investment Plans (SHIP), commented: “It’s pleasing that improvements have been made, though there is more work to do. The lifetime market is not about selling a product; that should be the last thing talked about. Lifetime mortgage intermediaries need to think about the overall financial position of a client, as with most clients, over 50 per cent of their money is tied up in bricks and mortar.”
