Southern Pacific Mortgage Ltd (SPML) has said the size of both the broker and packager markets are set to shrink as a result of impending regulation, following research in the broker and packager communities.
Respondents to the poll said the December deadline for obtaining statutory qualifications will result in a reduction in the number of brokers and packagers operating in the market.
In addition, after December, more brokers would leave due to the cost of fees that will be payable to the FSA, the Financial Ombudsman Service and compliance administration costs. The drop in participants is estimated by respondents as 30%.
SPML is aware these results are not based on any factual knowledge of the costs involved in regulation.
Stuart Aitken, director of credit at SPML, said: ‘Nobody knows what the fees will actually be, although intermediaries involved in the life and pension business will know what they are paying in FSA registration already. We contacted the FSA and its response was that it is all yet to be decided.’
On a positive note, Aitken said the streamlined market will lead to increased professionalism.
He said: ‘For those who remain in the market ‘ and that will be the majority ‘ they will have demonstrated their ability to comply with the FSA and will have the additional status of working in a market that is regulated by the Government.’