The Financial Ombudsmen Service has announced that it is to be involved in preparing Mortgage Brokers for full regulation by the Financial Services Authority next year.
What's all this about? Quite simply, currently if you are advised or purchase a life insurance, pension or investment contracts you are protected by exhaustive regulations laid down by the Financial Services Authority that advisers are required to comply with. These can be things such as telling you before you sign the application how much commission will be paid and being given a formal terms of business on how the firm operates and what protection you have.
Currently, if you seek advice of things such as a mortgage or home insurance or motor insurance you receive Absolutely nothing! There is no regulation and this all changes next year.
Our View
Financial Advisers have experienced regulation and rules for many years, in the early days it was not as strong as it is today. The rules and paperwork that surround the giving of investment advice are huge. The move to impose this on other finance sectors such as mortgages and general insurance can only be for the good of the consumer.
It is also welcome that the Financial Ombudsmen are preparing to help the mortgage industry come to terms with what is in store. The mortgage and general insurance industry is in for a shock!
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If you are a mortgage broker or general insurance broker visit the Adviser Zone to find out how we can help you with compliance and regulation.