The AMI says procuration fees must remain a remuneration option when the FSA sets its final rules for the mortgage market next month.
In its response to the regulator's Mortgage Market Review (MMR), the trade body repeats its stance any decision on remuneration must be agreed between the customer and the adviser.
In May, the FSA hinted it may scrap the payment of mortgage proc fees and introduce adviser charging instead in a bid to stamp out product bias.
But AMI director Robert Sinclair says: "Flexible remuneration options benefit consumers.
"A one-size-fits-all approach cannot be of benefit to people with drastically different financial circumstances and is likely to limit access to advice.
"With this in mind, we support FSA in not introducing alternative charging models into the mortgage industry."
AMI also wants the FSA to recognise the fundamental differences between fast-track and self-certification mortgages and ensure fast-track deals, which are appropriate for low-risk consumers, are not banned.
Sinclair adds: "Fast-track options should not be arbitrarily lumped together with self-certification ones. FSA must recognise the significant difference between the two models and therefore recognise that all consumers do not require the same level of checks."
In its response, it also asked for lenders to retain ultimate responsibility for assessing affordability and welcomed the FSA's view that the introduction of product regulation on LTV and LTI ratios is not necessary.
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Proc fees must stay
We have a mortgage broking arm to our Practice which charges fees and/or commission which works well. The amount of proc fee in relation to the amount of interest charged by the lender is miniscule.Are the FSA proposing the client should pay fees on top of interest and arrangement fees. I have also researched factory gate pricing which allows the provider to increase profits to the detriment of the client. At year 10, at 6% projection the client is £11000 worse off than through a commission based model.Transparency at it's finest! Totally flawed.Stakeholder pensions failed,Cat standards made no diffference and less people are saving but why take any notice? 86% of our clients prefer the commission model but why ask them?
Posted by: Peter Taylor
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The argument that banning proc fees to avoid product bias is completely flawed. In the current climate there is no significant difference between providers. What evidence do they have that it is/was widespread? If they have evidence, which could easily be collated from the RMAR returns and lenders, then they should be taking appropriate action against firms that have provided inappropriate advice in favour of a higher proc fee. I hope the FSA see sense and don't force the consumer to pay for good quality independent mortgage advice. Leaving those that decide not to pay at the mercy of the bank staff, who have an excellent track record of inexperience and mis-selling.
Posted by: David Rolleston