As a strong advocate for the value mortgage brokers bring to consumers, I welcome regulation that prioritises transparency, consumer protection, and value for money. The introduction of the FCA’s Consumer Duty in 2023 was a welcome and much-needed step in raising standards across the financial services industry. But alongside this, there’s a growing shift, subtle yet significant, in how the FCA appears to be encouraging more direct engagement between consumers and lenders.
The regulator’s efforts to streamline the market and reduce consumer reliance on intermediaries may sound efficient on paper. Yet, we must ask a critical question: Is this really creating a level playing field? Or is it unintentionally placing consumers at a disadvantage by diminishing the role of professional mortgage advice?
A new regulatory era: More burden on brokers
Under the Consumer Duty, brokers are held to a high standard of care. We must demonstrate that we act in the best interests of our clients, taking into account foreseeable harm, ensuring fair value, and delivering support throughout the product lifecycle. This holistic approach is essential in a market where mortgage terms, product structures, and client needs are increasingly complex.
Mortgage brokers, therefore, are required to go beyond the product – they must assess affordability, long-term financial implications, vulnerable circumstances, and changing life events. The Duty doesn’t just raise the bar, it rightly demands comprehensive, client-focused advice.
Lenders playing by a different set of rules?
Yet while brokers are bound by these extended obligations, lenders are increasingly being supported in offering direct-to-consumer execution-only models. Consumers can go straight to a lender’s website or app, pick a product, and complete the process, often with no regulated advice and minimal personalisation.
This raises a key concern: Are consumers equipped to make these decisions without impartial guidance?
While lenders are also subject to the Consumer Duty, in practice, they are not held to the same holistic advisory standards that brokers are. The emphasis on technology and frictionless journeys means consumers are at risk of selecting products that look appealing on the surface but may not be suitable in the long term. Who ensures the client has truly understood the risks, the structure of the loan, or the impact of future rate changes?
Not just about price – It’s about protection
Many consumers assume that going direct will save them money. But the real value of using a broker isn’t just about accessing more products, it’s about getting the right product.
A broker will assess dozens, sometimes hundreds, of options across multiple lenders, accounting for the client’s current position and future plans. They’re not just order-takers; they’re educators, planners, and advocates.
The direct-to-lender model might appear cheaper and faster, but it can easily overlook subtle factors such as:
· Early repayment charges or portability options
· Complex income (e.g. self-employed or multiple revenue streams)
· Credit history nuances
· Long-term suitability and future affordability
Without guidance, the consumer is ultimately left to navigate all of this alone, with the risk of missteps and future financial harm.
Is the playing field level?
The FCA’s intent may be to foster competition and choice, which is commendable. But we must question whether the current structure gives execution-only lenders an advantage by allowing them to bypass some of the advisory obligations that brokers must meet.
If brokers are expected to provide full-spectrum financial safeguarding, should lenders not be required to do the same, even in a digital, direct-to-consumer environment?
Moreover, the cost of compliance under Consumer Duty is real. Brokers are investing in training, documentation, client support, and robust advice models. If lenders can market directly with less of that burden, it introduces an imbalance that risks undercutting quality advice in favour of volume and velocity.
The way forward
The mortgage market is changing, and rightly so. Digital innovation, clearer communication, and fairer pricing are all necessary. But as we embrace progress, we must ensure that consumer protection remains consistent, regardless of the route a client takes.
It is not enough to make it possible for clients to go direct, it must also be safe. And that safety net is precisely what brokers offer.
Until the regulatory framework applies the same standard of protection to execution-only routes as it does to advised ones, we cannot truly say the market is on a level playing field.
Michael Craig is managing director of Brilliant Solutions
