In the US, the National Association of Mortgage Brokers is said to be one of the most powerful and active lobby groups around. With 41 affiliate organisations and 13,000 members it provides the only genuine national voice for mortgage intermediaries and is said to do a very good job.
The key role of the association is to represent the industry to the Federal Government, and as the mortgage brokerage industry in the US is regulated by 10 federal laws, five federal enforcement agencies, and over 45 state laws or licensing boards, you can see the necessity.
The regulation of mortgage advice and advisers is on its way to the UK. While most advisers have wrestled with an element of regulation for many years, regulation of mortgage advice will be something new.
The concerted efforts of IMLA and the CML to the first round of consultation, together with the individual responses of lenders, illustrated how important it is to engage in a dialogue on these weighty issues.
But here lies the gap. While there are trade bodies that represent a section of intermediary interests in the UK, there is no single voice for mortgage advisers that speaks for the wide variety of intermediaries who act for clients and provide information and advice on mortgages. It may be possible to take the view that this is acceptable because the more sectional trade groups will protect their members’ interests and help make their members more powerful in the mortgage market, but I believe this is wrong.
In the absence of a strong lobby for the industry, we stand to get a regulatory regime that does not favour the small firm and the less specialist firm. The end result of this is that independent mortgage advice, flawed or otherwise, will become available to fewer individuals who will have little choice but to buy direct or from a larger intermediary with the budget and organisational muscle to stay in the market. We stand to lose the local intermediary offering local advice on a modest scale.
There is much talk at present about the industry getting itself organised and making sure it is represented in these crucial debates. It is, however, notable that those doing most of the talking are not the intermediaries themselves. Perhaps the average mortgage adviser is too busy with the challenge of running an already highly regulated business to spare the time to get involved in the formation of a trade body.
But the danger is, if no means is found of demonstrating to Government the value that the mortgage intermediary industry delivers to the consumer, then there will be little trade left to organise an association around.