The mortgage industry is well-positioned for consumer duty.
According to the chief executive of the Association of Mortgage Intermediaries (AMI), the Financial Conduct Authority does not prioritise the mortgage industry when it comes to consumer duty.
Robert Sinclair said at the AMI dinner: “All the conversations I have had with the regulator are, genuinely, for this sector that this isn’t about you.”
The mortgage market, according to Sinclair, differs from other financial services sectors in that it uses a sourcing system and criterion search to conduct numerous comparisons and then provide the best recommendations, but in other areas, product comparison is not as thorough.
“We should stand up and be proud that we can actually say we do good things well, but that is not to say there aren’t things we can be better at.”
Standard variable rates, reversion rates, early repayment fees, and exit fees, he claimed, were “at the edges not at the core of the issue,” and that there was “debate to be had” about them.
Additionally, Sinclair stated that broker fees might be scrutinised and that it would be crucial to have “very clear policies” on fee structure.
Regarding product withdrawals, customers need “help and understanding.”
Sinclair stated that the “challenge here is at the sharp end of this, there are customers who need help and understanding” in reference to short notice product withdrawals and lender repricing.
He pleaded with the lenders to “give us [brokers] as much information as you can” so that brokers could aid in educating and informing their consumers.
Also urging brokers to “take that information and use it sensibly and responsibly to ensure that the outcomes we have work for the consumer, and we don’t enter into…warfare that does nothing for either side but will only cause damage to the customer,” Sinclair also urged on brokers to avoid entering into such conflicts.
According to him, “technology should be making a difference” in quick withdrawals.
“Intermediaries currently dominate our market, and I don’t see that changing in any significant way in the future. However, working together to make everything run smoothly is essential.”
Government has committed “grave dereliction of duty” by failing to advance EPC legislation.
The government had attempted to hasten the green agenda with planned EPC legislation, but Sinclair said they had “since abdicated their responsibility in terms of doing anything tangible around this.”
“I think that’s a serious breach of duty. I am concerned about the environment because I think that global warming is real and that we are in the midst of a self-created crisis. Therefore, we have two options: we can wait to be informed or we can decide to act now, he stated.
Sinclair noted Nationwide’s 0% extra borrowing deal as an example and welcomed product developments from lenders.
The key, he said, is to consider how to do that in a way that benefits the customer rather than just your business.
“To every broker in the room, I think you will need to be the catalyst for all of this because consumers will see you as a place they want to come to talk about how to finance changes when they do get interested in this,” the speaker said.
In order to guide clients in the “right direction,” he claimed that brokers would need to become knowledgeable about retrofit in the same way that they are familiar with limited companies and special purpose entities in buy-to-let.
The mortgage industry must ‘grow information’ regarding job opportunities.
According to Sinclair, the industry has to “grow information” about the field as a job and improve its marketing.
“We need to find a way to transform that,” he said. “We are not good at trying to tell people in schools or universities what a good industry this is to work in.”
In order for individuals to be more prepared and understand things like tax, mortgages, credit cards, pensions, and insurance, he also urged for improved financial education in schools.