The mortgage advice sector is currently facing a major threat that the industry seems dangerously close to missing.

The FCA’s latest consultation paper (CP25/11), which proposes removing the requirement to give advice during any interactive dialogue with a client, is being talked up as a step towards flexibility and simplicity. But that interpretation ignores the deeper reality.

This paper risks undermining the entire value of advice, devalues the role of the adviser and what we provide, and flies in the face of everything the FCA has told us about Consumer Duty over the past few years.

Let’s be clear: this consultation is a huge win for lenders who have long wanted to reduce the number of mortgages that come via advisers, and in turn, cut the amount they pay in procuration fees. The FCA states that if just 7.5% fewer borrowers used brokers, consumers could save £21.4m in fees. That’s the angle being spun – cost savings and more ‘choice’ for consumers. But the reality is very different.

There is no mention of the protections that advice affords consumers. No acknowledgement that the majority of advisers don’t charge fees. No recognition that execution-only decisions can lead to unsuitable mortgages, poorer outcomes, and a lack of essential protection conversations. This proposal is silent on the value of advice and the wider role advisers play in a client’s financial life, something Consumer Duty explicitly reinforced.

And that’s the heart of the problem. We’ve just spent the past few years preparing for Consumer Duty.

Advisers were told they had to stop being order-takers and start being holistic financial professionals. That meant seeing the client in the round; understanding not just the mortgage need, but what else was required to deliver a good outcome.

The Duty was clear: most consumers will never see a financial adviser and so their mortgage adviser is likely the only professional they will ever engage with. That adviser, then, becomes a guide: signposting clients to protection, surveying, conveyancing, wealth advice, and more.

CP25/11 throws all of that under the bus.

If you remove the advice trigger, who carries that responsibility? Who assesses whether the client might need income protection? Who notices the LTV impact of a down valuation? Who flags that a term beyond retirement age could create long-term affordability issues?

The FCA wanted advisers to take a wider, joined-up approach and now it is proposing rules that make that harder, not easier. If this is the direction of travel, then why did the FCA make such a public push for Consumer Duty in the first place?

The answer, sadly, appears to lie with lender pressure. This paper bears all the signs of influence from institutions who resent paying for intermediary business they believe doesn’t require advice.

But that’s a gross misunderstanding of the advisory process. Even the simplest remortgage requires a proper review. Circumstances change, protection needs evolve, affordability shifts. Taking advice out of the process increases the chance of getting the mortgage wrong and the consequences of that can be devastating.

A mortgage is not a credit card or a gym membership or a broadband deal. It is the single biggest financial commitment most consumers will ever make. Getting it wrong could jeopardise their home, their family’s security, their long-term finances. Why, then, is this the product the FCA believes is suitable for execution-only treatment when it’s actually the last product it should be considering for such a process?

Consumer Duty was supposed to raise standards. Yet this CP suggests for a certain type of case – whatever that ends up being – it’s perfectly acceptable to bypass advice altogether, so long as the lender meets its disclosure requirements. It makes a nonsense of the Duty’s intent.

CP25/11 says 97% of new mortgages since 2015 have been advised. That’s not a problem. That’s a success. It reflects the trust consumers place in advisers and the peace of mind that advice brings. The fact the regulator seemingly wants to chip away at this shows how little some lenders value that and how ready the regulator seems to be to let them.

Trade bodies need to wake up. Ami should be leading the charge to challenge this. We are on the verge of seeing years of progress – on professionalism, on holistic service, on client care – unravelled by a quiet, technical regulatory change that strips advisers out of the mortgage process.

The FCA talks constantly about good outcomes. Yet this paper increases the likelihood of poor ones. It introduces more risk, not less. It weakens protections. It empowers the wrong people in the process.

If the industry doesn’t push back, this will pass unnoticed and will fundamentally change our sector. And when it does, the damage will be done – to advisers, to consumers, and to the credibility of the Consumer Duty itself.

Sebastian Murphy is group director at JLM Mortgage Services