Proposals around changes to mortgage rules, if not properly implemented, could “risk undermining fundamental consumer protections and marginalising the role of advisers, right when their expertise is needed most”, says Association of Mortgage Intermediaries (AMI) chief executive Stephanie Charman (pictured).
Speaking at the AMI Dinner last night, Charman said the AMI welcomed efforts to “simplify the process”, but some proposals, “if implemented poorly, [mean] the review could radically alter how consumers engage with the mortgage market, raising serious concerns about suitability, informed decision-making, and the future of advice itself”.
She explained that “on the surface”, the Financial Conduct Authority’s (FCA’s) consultation proposals seem to promise faster, cheaper, and simpler mortgage journeys, which was “positive”.
However, Charman said there were “more concerning and complex realities” beneath the headlines.
The regulator announced that it would be consulting on mortgage rules so it would be easier for consumers to talk about their options, lower their mortgage terms and access cheaper products for remortgage.
Charman pointed to the example of making it easier for people to speak to their mortgage provider about their options without having to go through the advice process if not needed, which could potentially encourage a shift towards execution-only deals.
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“The consultation paper itself acknowledges that 97% of mortgage sales are advised, and we know that around 90% of these are delivered via intermediaries. You struggle to understand how this well-established model – one that consistently supports good outcomes – is now seen as detrimental to consumers or lenders.
“Encouraging a shift toward more execution-only sales is worrying. It’s likely to result in poorer outcomes for customers, particularly in an environment where financial decisions are increasingly complex. A mortgage is, after all, one of the most significant financial commitments a person will make in their lifetime,” she added.
The dominance of product transfers has also been highlighted in the FCA consultation, with the FCA saying some barriers and costs made remortgaging less attractive.
However, Charman said the trend of product transfers had been “largely driven by market conditions, not by adviser behaviour”.
“More importantly, where product transfers are advised, it’s because the adviser has done their research and determined it’s the best outcome for the client. That’s not a glitch in the matrix – it’s the system working exactly as it should,” she noted.
Charman said the role of advice “extends far beyond the mortgage transaction itself”, as it plays a “crucial role in ensuring that customers are adequately protected, particularly through protection reviews”.
She said engaging with the FCA, working with other trade bodies and talking to its membership to discuss the consultation has been a “top priority”.
Charman said she hoped that regarding the upcoming discussion paper, which covers the full gamut of the mortgage market, the AMI hoped it could spark “broader conversations with key stakeholders that leads to meaningful change”.
“AMI’s position is clear: innovation should enhance advice – not replace it. Consumers don’t just need speed – they need certainty, clarity, and support. Yes, they need choice – but it must be [an] informed choice. Stripping advice from key moments in the mortgage journey doesn’t empower consumers – it risks leaving them with less clarity, fewer safeguards, and no one to turn to when things go wrong,” she noted.
‘Mortgage and advice landscape is evolving faster than ever’
Charman said it was an “understatement to say that the mortgage and advice landscape is evolving faster than ever”.
She continued: “I am an optimist and always try to see opportunity, but we have some significant headwinds to navigate. The economic backdrop is changing the way people approach homeownership – affordability is no longer just about what you can borrow, but what you can sustainably repay.
“Borrowers are thinking longer term, with many prioritising stability over chasing the lowest rate. And increasingly, they’re looking for advice and guidance, which is positive for all.”
Charman added that the AMI has “never been busier” and had a “broad and growing list of policy priorities”, in addition to its core role of responding to consultation papers.
Areas that the trade body are focusing on include the Appointed Representative regime, working with the Home Buyers and Sellers Council, vulnerable customers and continuing to embed Consumer Duty.
Charman added that it was also “working closely with the Equity Release Council” to continue to evolve its “collective thinking around [the] lifetime mortgage market”.
She also pointed to the work it was doing through the Green Mortgage Advice and Working in Mortgages Initiatives.
AI is not replacing the adviser
Charman added that artificial intelligence (AI) was not replacing the adviser, but it was “providing an opportunity for advisers to do more of what they do best”, including customer interaction, providing guidance and advice.
She said the AI adviser model showcases she had seen had been “impressive”, but there were “limitations”, as they could not offer “personalised, tailored recommendation advice provides”.
“In this climate, transactional models are vulnerable. The future belongs to firms that build lasting client relationships. This means moving from ‘one and done’ mentality to an advice model that includes regular reviews, anticipates life changes, and incorporates financial resilience,” Charman said.
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