From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.


Published: 15 July 2015 | Author: Bernard Clarke

Commenting on the recent publication of the thematic review of mortgage advice and distribution, the Financial Conduct Authority’s (FCA) acting director of supervision, Linda Woodall, welcomed the work undertaken by lenders and intermediaries in delivering mortgage advice. But there was still room for improvement, she said, and the FCA would continue to work with firms to help them deliver consistently good outcomes for consumers.

We echoed those sentiments in our own response to publication of the review. Lenders had had a huge workload, we said, in implementing the comprehensive rule changes in April last year as a result of the mortgage market review (MMR). And those changes have been introduced with little disruption for consumers or to the market more generally. But there was more to be done to refine the ways in which firms operate:

Work is evolving, as some lenders seek to fine-tune their processes. Like us, individual firms will welcome the opportunity to work with the FCA towards consistently delivering good outcomes for consumes.

The review did not identify "systemic consumer detriment" and had a number of other positive findings:

  • In a majority of cases (59%) where advice was provided customers were given a suitable mortgage recommendation.
  • In only a very small number of instances (3%) was a recommendation judged to be unsuitable.

Lenders will now reflect carefully on the review’s findings, and stand ready to work with intermediaries to improve the experience for consumers. 

The industry welcomes the FCA’s feedback and, in particular, the regulator’s commitment to work with the CML and with firms to deliver good outcomes. Today, we look at some of the review’s findings, but this is a far from comprehensive list – we will be reflecting with members on the review in more detail:

  • The FCA found that the quality of advice in the mortgage market was mixed. Some firms were engaging customers in focused and relevant discussions, leading to suitable recommendations based on a good rationale. But there was a lack of structure to the advice from other firms, with a risk that advisers were not getting sufficient understanding of the customer’s needs and circumstances on which to base a recommendation.
  • Both intermediaries and lenders had scope to take a more customer-focused approach to giving mortgage advice, the FCA said. This included better gathering of information about borrowers’ needs and circumstances, and probing consumer's pre-conceptions to determine whether they really do need what they think they need. The FCA found that larger retail intermediary networks had most work to do to manage and mitigate the risk of poor outcomes for consumers.
  • Firms needed to be careful about relying on completing point-of-sale application systems. In some cases, there was little flexibility for advisers to use their judgement and adapt delivery to meet the customer’s needs. But the best performing firms were able to strike an appropriate balance.
  • There was a risk that being cautious about ensuring that unqualified staff did not provide regulated advice could prevent firms from providing information to customers. Firms needed to consider the needs of customers for information, and ensure that their processes were flexible enough to accommodate those needs.
  • Some customers were confused about the purpose of the questions they were asked and worried that they may be ‘caught out’ or declined finance if they answered questions ‘incorrectly.’ The FCA’s research suggested that this may lead customers away from volunteering all relevant information to an adviser.
  • The regulator said there was a risk of advisers “shoe-horning” customers with credible plans for repaying interest-only mortgages into repayment mortgages that may be less suitable for them. It said that intermediaries often assumed that interest-only mortgages would be unsuitable for some borrowers.

Following publication of the review, we will be working with the FCA and with our members later this summer to help identify good practice in delivering advice to consumers. The industry recognises the importance of  good experiences for customers, and more than a year on from MMR implementation it is a good time to take stock and review.