Public trust at stake as FSA consults on mortgage sector

19 October 2009

The FSA has today outlined its review of the mortgage market.

The regulator is looking to:

• apply some elements of the RDR professionalism proposals;
• include all aspects of regulation including conduct of business, prudential standards, and crime;
• will consider a range of remedies including amendments to the FSA Handbook; and
• will consider whether Retail Distribution Review (RDR) proposals should apply to the mortgage market.

The CII believe the financial crisis has illustrated a need to improve the technical ability and ethical behaviour of individual practitioners themselves. Richard Fox, director of mortgage strategy at the CII said, "There is clearly a need to improve public trust in mortgage distribution and greater professionalism must be at the core of rebuilding consumer confidence. Over 60 per cent of mortgage advisers are already members of the Society of Mortgage Professionals and the CII has a proven record of encouraging ethical behaviour amongst its membership.

"To ensure all consumers receive a service they can trust, improved knowledge, understanding and ethics must be applied to all practitioners not just the advised sector. In 2008-2009, over half a billion pounds worth of sub-prime mortgages (the root of the 2007 mortgage melt-down) were sold without advice *. Consequently we believe the FSA must concentrate on building public trust in those areas of distribution that are of most concern to borrowers – non-advised sales."

For non-advised sales the CII has outlined those areas it wants to see more thoroughly regulated by the FSA:

Standards of Knowledge: we think individuals need to enhance their technical knowledge and skills to improve their services to customers.

Standards of Conduct: the individual practitioners who deal directly with customers have tended to be driven by a commercial sales driven culture rather than focusing on the longer-term needs of customers.

---

Press releases, papers and documents published on this page are the intellectual property of an organisation unrelated to ePolitix.com. We promote their parliamentary and political campaigning activities as they are subscribers to the ePolitix.com service.

As such, ePolitix.com does not edit, endorse, or attempt to balance the opinions expressed on this page. The content of press releases and other such types of content are the responsibility of the originating organisation.