A little over a decade ago, the Mortgage Market Review (MMR) transformed the way mortgages were arranged in the UK, driven by an intent to improve consumer outcomes.
After the financial crisis exposed numerous flaws in lending practices, the FCA intervened to improve standards across the market. That included the advice process.
Pre-MMR, non-advised sales, where the questions were often scripted and typically no suitability assessment was made, accounted for a third of mortgage transactions.
In the regulator’s own words, this led to ‘confusion’ among borrowers about whether they had received advice as well as ‘poor-quality sales’.
To avoid this, as part of the MMR the FCA prohibited execution-only sales where there was an ‘interactive dialogue’ in a sale or contract variation, such as a phone call or an exchange of messages over email or live chat.
It was a move designed to protect consumers from taking mortgages they didn’t fully understand, often without realising that being given ‘information’ meant they hadn’t received advice at all.
However, the regulator is concerned that those long-standing and greatly improved advice rules are ‘constraining innovation’ in the use of digital channels and limiting ‘more than intended’ the ability for borrowers to choose the execution-only route.
That’s why now, in 2025, the regulator is consulting on proposals that could partially unwind some of the protections it introduced as part of the MMR. I think this feels like an inadvertent consequence.
CP25/11 sets out plans to make it easier for consumers to be offered the execution-only route by removing some of the procedural hurdles that currently discourage that option.
At first glance, this may seem sensible. If a borrower is confident in their ability to self-serve, why shouldn’t they be allowed to? The principle of consumer choice is important.
But we and many in the mortgage industry are concerned that the FCA may have underestimated the risks of loosening the rules.
The regulator has conceded that the prevalence of non-advised sales pre-MMR led to poor outcomes. That’s why the ‘interaction trigger’ was introduced in the first place.
There’s a risk now that we’re opening the door to history repeating itself. The danger isn’t in allowing execution-only – that option has always remained available – but in making it feel like a low-friction shortcut for borrowers who may not truly understand the protections they’re giving up by opting out of advice.
And let’s be clear, mortgages are complex. Product criteria shift constantly. Fees, incentives, early repayment charges, portability clauses – there’s a lot to contend with.
Even a keen, financially literate borrower won’t have anywhere near the same depth of knowledge as a qualified mortgage adviser. Brokers are experts. They don’t just find a good rate – they help clients avoid expensive mistakes that may only become obvious years down the line. Their advice is effectively insured by PI cover.
When it comes to something as material as arranging a mortgage, the stakes couldn’t be higher. So, consumers need support to make the best decision for their circumstances.
The vast majority of borrowers appreciate that, which is why we don’t think these proposals, if they come into force in their current format, will lead to a huge swing in favour of execution-only. The FCA is uncertain how many consumers would opt out of advice if these proposals come into effect.
But let’s not kid ourselves, some borrowers – perhaps many – will be directed to this path or choose to go down it – and some to their significant detriment.
The consultation deserves a fair hearing. But more than a decade on from when the MMR made advice central to mortgage sales, we’d do well to remember why that regulatory change was made – and how easily consumer protection and good outcomes can be placed in jeopardy if we’re not careful.
