Pension freedom, buy to let and the ethical standpoint

Should mortgage advisers check the client understands the consequences of using their pension fund to purchase a BTL property?

Of course a mortgage adviser should check, but it is not his or her responsibility to police what advice a client has had before being contacted to arrange a mortgage.

The decision to take advantage of the relaxation in the rules governing pensions and the ability since April to extract a lump sum is an individual choice. People should have a clear understanding of the ramifications before they see a mortgage broker.

Unless the mortgage broker is regulated to offer pension advice he or she must not be drawn into that kind of conversation. The job is simply to get the best buy-to-let deal they can. They should certainly ask whether their client has taken the right advice about the use of their pension proceeds but it should not be a barrier.

It is not mandatory for a client to have seen an IFA or other qualified adviser before seeking out mortgage advice for a buy-to-let purchase. There is an unhealthy assumption that the public are somehow not bright enough to do their own research and must have asked an expert. Personal responsibility for an investment decision needs to be better highlighted, but the more advice sought or research undertaken can only lead to better outcomes.

Tony Salentino, director at Complete FS

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