The Association of Mortgage Intermediaries (AMI) has concerns that the Financial Conduct Authority’s (FCA) proposed changes to mortgage rules could weaken consumer protection and undermine the principles of Consumer Duty, which could lead to serious long-term harm for consumers.
The FCA’s latest consultation paper on its Mortgage Rule Review suggests making it easier, faster and cheaper for consumers to speak to mortgage lenders, switch products, and remortgage. While pitched as a win for consumers, AMI is concerned that the proposals, as outlined in the consultation paper, overlook the critical role of mortgage advisers. AMI believes reduced access to quality advice will result in poorer outcomes for all.
The consultation highlights that currently, 97% of mortgage business is conducted through advice, a fact AMI says demonstrates the value advisers bring. The intermediary channel is a core strength of the UK mortgage market and AMI questions the underlying assumption that this is a market failure. With low levels of customer complaints it is unclear where consumer detriment lies.
The concern is particularly acute around product transfers. In 2024, 1.6 million borrowers remortgaged, but 83% stayed with their existing lender. Market dynamics have driven this trend, yet many of those who stayed with their existing lender still sought advice, meaning alternative options were still considered alongside the potential for a wider conversation around protection needs. By encouraging more consumers to go direct, the FCA risks pushing borrowers into execution-only transactions without fully understanding that a better option may have been available, in addition to the protections and advice they are giving up.
Consumers already have choice today with high street lenders offering advice through direct propositions (branches or telephony), online/non advised or through advisers. Removing advice raises questions about who will be liable when things go wrong—will lenders bear the burden, or will the Financial Ombudsman Service (FOS) face more complaints from consumers who have mistakenly taken the wrong option for them after being faced with a myriad of choices they may not fully understand. The financial aspect of increased FOS cases cannot be understated, and it is an increased cost all parties will be subject to.
Ahead of this consultation paper being launched AMI has been actively engaging with its members, the regulator, and other trade bodies to ensure the voice of the intermediary market is heard. The organisation supports innovation but insists it must align with the spirit and the letter of the Consumer Duty and not at the expense of advice.
Stephanie Charman, Chief Executive of AMI comments:
“Mortgage advisers play an irreplaceable role in helping consumers navigate complex, life-changing financial decisions.
You simply cannot deliver the Consumer Duty by removing advice. The Duty requires firms to act in ways that deliver good outcomes, support consumer understanding, and empower effective decision-making—none of which are achieved by steering borrowers away from professional advice.
The proposals set out by the FCA go in the opposite direction. They risk stripping consumers of essential protections while simultaneously threatening the long-term viability of thousands of advice firms across the UK. This isn’t just about loss of income, it’s about undermining an advice model that has proven time and again to act in the consumer’s best interest.
We will be engaging with the FCA to look at how we support their objectives, working in collaboration with lenders and advisers, not against them to simplify the mortgage process without sacrificing the value high-quality advice brings.”
