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Independent Mortgage Advisor

Independent Mortgage Advisor

Independent Mortgage Advisor’s main role is to assist clients in searching and applying for the right mortgage. They must also ensure their clients are fully informed about the different kinds of mortgages available; thus making sure they have the best mortgage based on their situation and finances, whilst guiding them through the whole process.
A Mortgage Advisor in a bank or building society would only sell their company's mortgage products. An estate agent or mortgage broker would offer mortgages from a range of companies. An independent financial Advisor (IFA), you would advise on all types of financial products including mortgages.
They need to follow strict rules and guidelines from the Financial Services Authority (FSA), which make sure advisors act fairly and are qualified to give the right financial advice.
A trainee Mortgage Advisor must take an industry-recognised qualification that meets Financial Services Authority (FSA) standards such as Chartered Insurance Institute (CII) and Certificate in Mortgage Advice (Cert MA).
The recently published consultation paper (CP146) has revealed that the Financial Services Authority (FSA) is unsure how to classify and identify the different types of mortgage intermediary. The two options proposed by the FSA  is to either allow brokers to call themselves independent, as long as they disclose which lenders they deal with at the initial client meeting. Or create a category of independent mortgage intermediary, who would be subject to the same regulatory requirements as advisers working in the investment market.
The two definitions have caused concern for the FSA because if brokers are allowed to use the title 'independent' it will cause confusing for the customers. But if independent brokers are linked to rules governing IFAs, they may have to work off defined payment rules and consumers may not want to pay for advice, which would reduce the number of truly independent advisers in the market.
A major issue for the FSA is the outcome of CP121, the consultation on depolarisation, which will detail how the IFAs are allowed to receive payment. If a new category of independent mortgage adviser is created they could be governed by any revised changes contained in this, but it will not be published until later on this year.
The head of strategic development at Britannic Money, James Mayne commented that 'When you simplify the issue it boils down to this: how can a firm call itself an independent mortgage adviser when it isn't independent and doesn't provide independent advice? On the one hand, there is pressure to keep the title independent, because it is a unique selling point and differentiates advisers from the high street, but on the other, consumers need to know whether they are actually getting independent advice.'
The Managing Director of Mortgage Force Rob Clifford supported James Mayne’s statement. He said 'My prediction is that defined payments for independent mortgage advice would have to be reviewed. It is worrying to think brokers may soon not be able to call themselves independent if they receive commission. Brokers are not going to mis-sell mortgages on account of £10 or £20 difference. It is different in the IFA sector where different products have different procuration fees.'