Nigel Stockton, financial services
director at Countrywide, has been more vociferous than others on this point. “I’m afraid that words fail me on the FSA’s decision to indefinitely delay its plans to introduce individual registration for mortgage brokers,” he says. “I think most of the industry is up in arms about this – well except for lenders of course – who have now escaped the cost and headache of individual registration. “I had hoped the FSA would have put the needs of consumers first on this critical issue and used the MMR as an opportunity to create an even playing field. I do think the FSA should reconsider.”
Stockton has a point. The regulator’s decision is viewed by many as being tantamount to scrapping individual registration right at the time brokers - not to mention consumers, those the FSA is mandated to protect - need it most. In its stead the FSA is rumoured to have spoken to lenders directly, expecting them to do their own enhanced due diligence on introducers.
RESTRICTING DISTRIBUTION Lenders are pulling back from the broker market behind closed doors by several means. Indeed NatWest recently made the decision not to distribute to some smaller networks. Larger networks have been told to expect similar volumes to last year but distributors around the edges of the market may start to feel the pinch as the big boys are given priority more and more. Lenders say it is about quality control, and in part this is true, but the other thing it gives is volume control.
Small and deliberate changes to the way in which lenders deal with distributors have been commented on by major network and club heads – though few are prepared to stick their head above the parapet and say it in black and white. Peter Brodnicki, chief executive of Mortgage Advice Bureau, is one of the few who is upfront about it. “Lenders are certainly reacting to the direction of travel of the FSA and their statements about them needing to know their broker panels better,” he says. “The FSA itself has said that lenders can’t just rely on FSA authorisation as their yardstick.
“It would be understandable if lenders
therefore start at the largest distributor firms and work down the list. The question is, will they get to a point - in size terms - below which they will not bother? They will certainly feel that bigger is generally better. But in times of constrained supply, lenders can pick and choose who they do business with, both customers and intermediaries. Clearly scale alone is not the answer or the only criteria... but that’s the reality, whether we like it or not.”
DIVIDED WE FALL
Which brings us back to check. The reason it’s not check mate is ironically also down to the regulator. The Mortgage Market Review has put advice at its centre. It is regulation that supports educated choice: the framework brokers need to thrive is
being put in motion, in large part thanks to the work done by Sinclair and AMI. But the intermediary market is not dealing with this power play at the moment. Pawns fall when they are isolated and do not work as a unit. The broker market against all odds has already proven it can work as a unit. Where IFAs have struggled to secure the outcome they badly want and need in a post Retail Distribution Review world in large part because of their inability to speak together as one united front, mortgage brokers have in MMR exactly what they want and need – provided of course it goes through unedited.
In many ways there is a perfect storm
brewing. AMI has left its ailing sister AIFA and stands alone but financially secure in 2012. While Sinclair says the AMI board has made it clear to him the trade body’s immediate priorities lie in getting a good outcome for the MMR and European mortgage directive, he is also acutely aware that consumer confidence in and awareness of financial advice is in need of a facelift. Broker introduced mortgage business is and always has been a tap that lenders turn on and off at will. With funding still severely restricted, capital constraints tightening and economic growth languishing in the doldrums, it is no surprise that they are closing this tap and relying instead on their branch networks to bring in the business they need.
Mike Lawton, managing director at Which? Mortgage Advisers, recognises that in fact brokers “don’t have much clout” with lenders in such a subdued
www.mortgageintroducer.com
MORTGAGE INTRODUCER MARCH 2012 31
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52