Mortgage advisers and intermediaries may have to sit additional exams, on top of current requirement...
Mortgage advisers and intermediaries may have to sit additional exams, on top of current requirements to pass mortgage rules by the end of this year, says an FSA mortgage sales consultation published this morning.
Advisers who pass the MCCB's Fitness and Competence requirements by the end of December will be able to become regulated mortgage intermediaries through 'grandfathering', says CP146 The FSA's approach to regulating mortgage sales.
But mortgage advisers still be subjected to "top-up" exams or some other form of assessment to make sure advisers "are familiar with our new regulatory regime for mortgages" says the FSA.
Other initial findings of CP146 suggest lifetime mortgages, or equity releases schemes will be classified as high risk mortgage products, alongside impaired credit mortgages, because their complexity and opaqueness is thought to be much greater, and the threat of financial losses are similar to investment products.
Most buy-to-let mortgages are also unlikely to be regulated, says the FSA.
Three levels of sales channel are currently proposed - adviser, non-advised sales through filtering questions, and non-advised execution-only sales - however consultation is also being sought on whether distinction should be made between independence in the pre-sales process and tied sales.
There are also suggestions within the document that the cost of any sales process will also be restricted, as the FSA suggests "expensive fees for advice/mortgage arranging may be detrimental to consumers".
Further details of this consultation and responses from the industry will follow.
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