I was beginning to wonder whether it was just me. Earlier this month, the new FCA Consultation Paper dropped in a crescendo of unabashed positivity, with all the headlines focused on how the outlined proposals would speed up the ability of borrowers to change their mortgage via their lender.
Until you poked around in the detail, and what the FCA were seemingly concerned about was there being too much advice in our market. And that its speeding up plans involved a proposal to stop the requirement for lenders to tell consumers they should seek advice before taking out a mortgage.
As mentioned, on the face of it, the language was framed around improving consumer access, removing friction, streamlining the process. But make no mistake: the proposals point directly to wanting to increase execution-only mortgage sales and an attempt to remove advice from those cases where it deems it unnecessary and expensive.
And yet, up until this week, the silence from the adviser community had been somewhat deafening.
It surprises me because if these proposals were to take hold, they could have a seismic impact on advisers’ businesses. Not just in terms of mortgage advice income, but everything that has grown around that core proposition which develops when you deal with a client, namely protection, general insurance, conveyancing, referrals, long-term client relationships, and holistic financial planning.
Let’s start with what the paper actually says. The FCA wants to remove the trigger requiring lenders to point borrowers toward advice. Why? Because, according to the paper, too many people are being ‘forced’ to take advice when they, apparently ‘don’t want it or need it’.
This, no doubt, will come as a shock to those consumers who have taken advice in 97% of all new mortgage sales since 2015. That figure doesn’t suggest consumers don’t want it or need it, quite the opposite in my opinion.
That statistic demonstrates how deeply rooted advice has become in the UK mortgage market. But now, regulators are apparently suggesting advice may be an unnecessary hoop to jump through, and that consumers could save a significant amount of money if they forego it.
We should be deeply sceptical of who benefits here. Spoiler alert: it’s not the consumer. It’s the lenders, who stand to gain from more direct business, fewer broker commissions paid, and a tighter grip on the customer journey. The same lenders who have spent the last decade trying (and failing) to disintermediate advisers have pushed the door ajar. The FCA, astonishingly, is holding it open for them.
What happened to Consumer Duty? The great unifying principle of positive outcomes for the consumer? Because sending a borrower down the execution-only route might be frictionless, but it’s also risk-laden. Especially when we consider many consumers still lack the knowledge or confidence to select the most suitable deal, or even to understand the long-term implications of what they’re choosing.
And the idea that this is somehow going to ‘save money’ for consumers because they won’t be paying broker fees? Come off it. Most brokers don’t even charge a fee, and those that do usually account for it tenfold in savings and advice-led outcomes.
I’ll give you a perfect example. A friend of mine was about to remortgage recently. They have a chunky mortgage and their lender made them a direct offer. No adviser involved. But they happened to mention it to me, and I suggested they speak to an adviser. A few days later, they called me back to say that adviser had saved them thousands over the course of the next five years. Not only that, they now had proper cover in place, the protections that come with advice and the whole package made sense.
It’s not just about rate shopping. It’s about suitability. It’s about holistic financial planning. It’s about protecting the borrower from future risk. The very thing Consumer Duty is supposed to enshrine in every part of our sector.
The worry is not just what these proposals mean in theory, but what they could signal in practice. If the journey to advice has camouflage netting thrown across its path, then over time the consumer experience may regress to one of faceless processes, low-bar suitability, and higher lifetime costs. And for advisers, the domino effect could be severe: fewer mortgage leads, lower protection uptake, diminished GI sales, fewer conveyancing referrals, and the erosion of recurring client relationships.
What do we do about it? For a start, advisers and their representatives should get much louder. Question why this consultation hasn’t prompted more visible reaction. Respond to the FCA directly, but speak to trade bodies, aggregators, networks, and tech providers. Bring this discussion into the open.
And more tactically, treat this as a warning. If mortgage business becomes harder to win, advisers truly need to make every case count. That means doubling down on delivering protection, GI and conveyancing sales on every transaction. Embedding those income streams now, not later. Giving the client everything they need, not just what they came in for. Because that’s where your margins, your protection, and your long-term value lie.
The threat here isn’t just regulatory. It’s existential. No advice firm should be sitting on their hands while the FCA quietly reposition the whole sector back to direct distribution. The adviser community has faced down threats before. But only when it unites, speaks clearly, and acts quickly. Time to do all three I would think.
Harpal Singh is CEO at conveybuddy
