Barclays is scrapping all non-advised mortgage transactions despite the FSA's decision to water down the ban on execution only sales.
Online PR News – 24-January-2013 – Bristol – Around 3 per cent of the lender’s mortgage transactions are currently non-advised, all of which come from its telephony service. All 140 telephone-based staff will be trained to give mortgage advice.
In October, the FSA backed down from a ban on execution-only mortgages. Under the final MMR rules contract variations like changing the payment method, rate switches, retention deals or porting the mortgage can be non-advised as long as the consumer does not want to borrow more money.
Lenders can also write to customers detailing the products they have available and proceed on an execution-only basis as long as the customer is not “steered” towards a product.
However Barclays says it has decided to scrap non-advised sales altogether before the MMR is implemented in April 2014 to avoid confusion about whether the customer has received advice.
Barclays managing director of intermediaries David Finlay says: “We will not have an execution-only sales force, everything will be fully advised. If you look at what the regulator is trying to do, you have to ask why you would not go fully advised. If you do not, you could leave yourself open to that grey area where people think they are getting advice when they are not.”
Bristol Mortgage Brokers Owner and broker Wesley Davidson says: “If lenders are saying they will not use this opt-out for non-advised sales then I welcome it with open arms.”
Lloyds Banking Group, HSBC, Nationwide and Santander say they have not finalised their MMR propositions.