In its latest Mortgage Market Review paper the FSA proposes to scrap non-advised sales altogether and reserve execution-only sales for mortgage professionals and high net worth individuals.
Association of Mortgage Intermediaries director Robert Sinclair said he would expect there to be a threshold for execution-only sales above which suspicion might be triggered.
He said: “In the investment world it is unusual to see more than 10% of any advisory business going through the execution-only route.
“The FSA will be collecting data from all firms which will allow them to establish normal levels of behaviour and outliers.
“Undoubtedly this will lead them to undertake supervisory visits to those businesses to establish the bona fides of their levels of execution-only business.”
But Sheila Nicoll, director of conduct policy at the FSA, said the regulator has no set idea of what the new proportions should be and confirmed there would not be a trigger point for investigation.
She said: “We don’t have a fixed view on what proportion of mortgage sales should be advised and execution only in the future.
“We wouldn’t be challenging on percentages. In terms of supervising firms that may well be something that we take into account but it would be one indicator that our supervisors could use in order to provoke them asking questions.”
And she added: “We also expect firms to have monitoring in place and would ask them about their monitoring systems to make sure they were complying with our rules.”
Nicoll said making call recording compulsory on all mortgage sales was not part of the proposals.
