Mortgage Advisers
FCA Authorisation
Expert regulatory support for mortgage advisers, brokers, and intermediaries seeking FCA authorisation for mortgage and home finance activities.
Mortgage Regulation Landscape
Mortgage advisers provide advice and arrange regulated mortgage contracts, home purchase plans, and equity release products for consumers.
The FCA's MCOB sourcebook sets comprehensive requirements for mortgage advice, including affordability assessments, clear disclosure, and suitability.
FCA authorisation requires demonstrating appropriate qualifications (CeMAP), professional indemnity insurance, and robust suitability frameworks.
Typical Services
- Residential mortgage advice and arrangement
- Buy-to-let mortgage broking
- Equity release and lifetime mortgages
- Protection insurance alongside mortgages
How We Support Mortgage Advisers
- Role, product and journey stage mapping across adviser, intermediary, lender and administrator
- Permission scoping including second charge, equity release and home purchase plans
- Direct authorisation versus appointed representative decision, including the network exit case
- Adviser competence and CeMAP or equivalent qualification evidence
- Capital planning under MIPRU and professional indemnity cover
- Senior Manager identification and Statements of Responsibilities
- Connect application and regulatory business plan
- MCOB 4 advice and suitability framework, including the cheapest appropriate product explanation
- Disclosure pack reconciled across conversation, illustration and offer
- MCOB 13.3 payment difficulty policy for firms taking administering permissions
- Vulnerable customer framework covering financial difficulty, bereavement, relationship breakdown and health
- Financial promotions approval and DISP complaints handling
- FCA query management and case officer correspondence
- Senior Manager interview preparation
- Advice file review against the submitted suitability framework
- Compliance monitoring tested against actual files rather than document presence
- Variation of permission where the model expands into later life or second charge
- Ongoing regulatory change monitoring
Key Regulatory Requirements
Professional Qualifications
- CeMAP (or equivalent) qualification
- Appropriate mortgage knowledge
- Continuing professional development
- Competence assessments
Mortgage Advice Process
- Affordability assessments
- Suitability reports
- Disclosure of fees and commissions
- Clear client communications
MCOB Compliance
- Key Facts Illustration (KFI) provision
- Initial disclosure documents
- Product transfer guidance
- Vulnerable customer support
Financial Resources
- Base capital: £20,000 (MIPRU firms)
- PI Insurance: minimum £1.6m
- Adequate working capital
- 3-year financial projections
Required FCA Permissions
Mortgage permissions are defined by role and by product, and most firms need a combination of both.
Advising on Regulated Mortgage Contracts
Making a personal recommendation to a specific customer about a regulated mortgage, rather than only supplying product information.
- Recommendation suitable to needs and circumstances
- Reasoned rationale on file
- Cheapest appropriate product explanation
- Qualified advisers
Arranging Regulated Mortgage Contracts
Bringing about or helping to bring about a mortgage without making a personal recommendation, including execution only and application submission.
- Clear disclosure of non-advisory status
- Product information provision
- Application processing controls
- Staff competence records
Entering Into a Regulated Mortgage Contract
Applies to the firm that is the lender under the contract, not to the intermediary that introduced the customer.
- MCOB 11 responsible lending assessment
- Verified income and expenditure
- Interest rate stress testing
- Documented lending decision
Administering a Regulated Mortgage Contract
Applies where the firm services the loan after completion, including collections, arrears handling and account variation.
- MCOB 13.3 policy approved by the governing body
- Individual forbearance records
- MCOB 12.4 charge cost evidence
- Arrangements kept under review
Home Purchase, Home Reversion and Lifetime Mortgages
Separate home finance permissions from the standard residential set. Equity release and Sharia compliant home purchase must be applied for explicitly.
- Later life and equity release adviser competence
- Role mapping as intermediary or provider
- Product specific disclosure
- Second charge scope confirmation
Advising On and Arranging Protection
Needed where the firm also sells protection alongside the mortgage, which most brokers do. ICOBS applies to that sale, not MCOB.
- Separate demands and needs evidence
- Separate remuneration disclosure
- ICOBS status disclosure
- Distinct sales file for the protection sale
Permissions & scope
Which regulated activities the firm will carry on, and the exact permissions that follow from them. Everything downstream is scoped to this, so a permission asked for loosely is a business plan and a set of controls built against the wrong thing.
Business model
What the firm does, who for, and how it earns. The FCA tests whether the model is viable and whether the permissions being requested actually match it, rather than reading the two documents separately.
Governance & SM&CR
Who is accountable for what, and whether they are fit and proper for it. Senior manager responsibilities have to be mapped to named people and evidenced, not asserted in a paragraph.
Policies & controls
The procedures that make the model work in practice, and evidence they are followed rather than filed. A policy the firm cannot show operating is the most common gap at the gateway.
Financial resources
Capital, projections and an orderly wind-down. The figures have to agree with the business model rather than sit beside it, and the wind-down plan has to be costed.
Common Authorisation Challenges
Most applications stall on the same handful of scoping and evidence gaps, not on the rules themselves.
Confusing the Intermediary Role With the Lender's
The most common scoping error in mortgage applications. MCOB 11 responsible lending sits principally with the lender or home purchase provider, while the intermediary carries separate advice and disclosure duties. Applicants who present the lender's affordability decision as their own regulatory assessment get challenged. We build a role, product and journey stage map so each obligation sits with the entity that actually performs the activity.
Suitability Evidence That Only Matches a Product
MCOB 4.7A requires the recommendation to be suitable on the facts disclosed and on other facts the firm should reasonably be aware of. A templated note repeating product features without connecting them to the customer does not evidence that. We rebuild the fact find and suitability template around payment structure, term, rate period, flexibility, fees and risks.
No Process for the Cheapest Appropriate Product Explanation
MCOB 4.7A also requires the firm to explain why the recommended product is not the cheapest appropriate product in its range, and to record positive customer choices to pay a fee. The rule is not recommend the cheapest, it is make the trade off intelligible on file. Most applicants have no field capturing it at all.
Product Transfers Scoped as Like for Like
MCOB 11.6.3 gives limited exceptions where there is no additional borrowing beyond permitted fees and no change likely to be material to affordability. A switch to interest only, an extension into retirement, or adding or removing a borrower may all be material. Firms that label every same lender change like for like cannot show the exception applies.
Payment Difficulty Policy That Does Not Reach the Individual
MCOB 13.3 needs written policies approved by the governing body and reviewed periodically, plus reasonable efforts to reach agreement, time for the customer to consider proposals, and arrangements kept under review. Applications routinely submit a generic forbearance menu. The record has to show what the firm knew, the options considered, and why the arrangement was appropriate.
Leaving a Network Without the Function It Provided
Mortgage advice is one of the sectors where the appointed representative model dominates, and rising network costs push established firms towards direct authorisation. Firms making that move discover the network was supplying file review, promotions sign off and regulatory reporting. We assess whether direct authorisation is the better long term position and build the function that has to replace the principal.
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Learn more →Ready to Get Authorised?
From suitability evidence that stands up to scrutiny to a clean exit from your network, speak with our mortgage advice regulatory specialists about your FCA authorisation.
Phone: 0330 133 0811
Email: contact@memaconsultants.com