While the FCA’s rule changes make execution-only sales possible for Mortgage Advisers, even where there has been interactive dialogue, they should not be viewed as the default route. In practice, most customers will not know the precise details of the mortgage product they wish to take and will rely on advice to ensure the product is suitable. This means that execution-only transactions will remain the exception rather than the norm.
Where Advisers do encounter an execution-only request, they must take particular care to assess whether the customer is displaying any signs of vulnerability. If there are concerns that the customer might not fully understand the implications of their choice, or where advice is required to avoid foreseeable harm, Advisers must switch to an advised process. This ensures compliance with the Consumer Duty and prevents poor customer outcomes.
It is also important to remember that some scenarios are considered higher-risk and advice remains mandatory. These include debt consolidation, equity release, right-to-buy transactions, and shared equity arrangements. In such cases, execution-only is not permitted, regardless of the customer’s request.
By approaching execution-only with caution and ensuring robust processes are in place, firms can offer this service where appropriate without exposing themselves or their customers to unnecessary risk. As with all regulated activity, clear communication and comprehensive record-keeping will be key to demonstrating compliance.
