Broker trade body warns changes may erode advice safeguards and increase borrower risks
The Association of Mortgage Intermediaries (AMI) has expressed concern that proposed changes to mortgage regulations by the Financial Conduct Authority (FCA) may reduce consumer safeguards and potentially conflict with the regulator’s Consumer Duty obligations.
In a recent consultation paper, the FCA outlined a series of reforms aimed at making it simpler and more cost-effective for consumers to interact with mortgage lenders, switch deals, or remortgage. While the FCA positions the proposals as consumer-focused improvements, AMI has warned that the suggested changes risk marginalising the role of mortgage advisers — an outcome it argues could result in poorer outcomes for borrowers.
AMI highlighted that around 97% of mortgage transactions currently involve advice, a figure it says reflects the critical contribution of intermediaries to the mortgage process. The association questioned whether there is sufficient evidence of consumer harm in a system that already shows low complaint levels and high engagement with professional advice.
The intermediary body is particularly concerned about the impact on product transfers. While 1.6 million borrowers remortgaged in 2024, most remained with their current lenders. According to AMI, many still sought advice during that process, indicating a continued need for professional guidance even in what appear to be straightforward cases. It warned that steering more customers toward direct, execution-only channels may leave borrowers unaware of potentially better options or additional protections they are foregoing.
AMI also raised questions about accountability if more consumers move forward without advice. With a wide array of mortgage options on offer, the association argued that borrowers without professional support could make decisions that are not in their best interest. It cautioned that this might lead to an increase in complaints to the Financial Ombudsman Service, adding financial strain across the system.
While AMI supports innovation in the sector, it said such changes must align with both the letter and the spirit of Consumer Duty principles. The organisation has been in dialogue with stakeholders, including the FCA, trade bodies and its members to ensure that adviser voices are considered during the consultation process.
“Mortgage advisers play an irreplaceable role in helping consumers navigate complex, life-changing financial decisions,” said Stephanie Charman (pictured), chief executive of the Association of Mortgage Intermediaries. “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.”
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