Some two-thirds of mortgage providers do not have adequate structures in place to enable them to give suitable advice to customers, it has been claimed.
A new report from the Financial Services Authority (FSA) found that only one-third of firms had a “robust process”, while also stating that there was room for improvement at all points of the advice procedure.
After reviewing 252 mortgage firms, the FSA identified some of the poorer areas of the process to be the assessment of customer needs, record keeping and training and competence of employees.
“Poor processes increase the risk of unsuitable advice being given,” said Clive Briault, managing director of retail markets at the FSA.
He added that while it was “crucial” that customers are assessed properly, it is also up to the customer to consider what they can currently afford with a view to what they may be able to repay in future.
Last week, Nationwide Building Society’s quarterly review of house prices revealed that the average UK home costs £172,065.
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