The Association of Mortgage Intermediaries has warned that there was a risk that brokers could baulk from giving full advice on mortgage payment protection insurance (MPPI) because of increased attention from the Financial Services Authority.
They recommend that advisers should not attach MPPI to mortgage sales as a matter of course, and should consider all the options available to protect mortgage payments, by finding out what suits the client, their attitude to risk, their existing resources and whether they already have employer schemes, as clients often have long deferred periods when they still received a salary and therefore may not benefit from MPPI.
Our view
If mortgage brokers move away just because the regulator is watching they should get out of the industry all together. Regulation is here to stay for mortgage and general insurance and avoiding the matter would seem rather 'ostrich like' i.e. head in the sand.