FCA launches investigation into mortgage competition and dodgy referrals

Financial Conduct Authority looks into agents referring mortgage lenders

The Financial Conduct Authority (FCA) has launched a market study of competition in the mortgage sector, including looking into potential conflicts of interest arising from commercial arrangements between lenders, brokers and other players.

The big aim of the study is to “understand whether consumers are empowered to choose on an informed basis between products and services and are in a position to understand whether these represent good value for money”, having originally announced a pending investigation back in May.

It’s broken down into two key questions:

  • At each stage of the consumer journey, do the available tools (including advice) help mortgage consumers make effective decisions?
  • Do commercial arrangements between lenders, brokers and other players lead to conflicts of interest or misaligned incentives to the detriment of consumers?

The FCA will also review whether there are opportunities for better technological solutions to problems we identify, including greater use of digital channels to deliver information or advice.

An interim report with preliminary conclusions is due to be published in the summer of 2017. This should allow stakeholders to weigh in with thoughts and opinions before the final report is signed off in early 2018.

Christopher Woolard, Executive Director of Strategy and Competition at the FCA: “As a mortgage is likely to be the biggest financial commitment most people make in their lifetime, we’re keen to ensure that competition in the mortgage sector is healthy and working to the benefit of consumers.”

Full info on the Mortgage Market Study here