Gone are the days when regulation was straightforward and based on information supplied by lenders. In the wake of the decision to monitor mortgage advice, the need for advisers to be understood and fairly represented has come to the fore.
Serious consideration needs to be given to the most effective way of achieving this. The Financial Services Authority (FSA) needs to understand the decision process that lies behind individual broker advice. Taking the general head-office view of a large lender would spell disaster for our industry sector.
So why can’t this role be carried out by an existing body such as the Association of IFAs (AIFA), or the Life Insurance Association (LIA)? Quite simply because their expertise lies elsewhere and they do not offer a mortgage support function for brokers. Similarly, the Council of Mortgage Lenders’ (CML) main role is to support the lender and it will be its views that will be taken to the FSA ‘ meaning the broker voice may not be heard.
There is an overwhelming need to establish an organisation which will gather the views and opinions of brokers and represent that voice within the market as well as make representations to the FSA. The National Association of Mortgage Brokers and Advisers (NAMBA) is the only solution currently on offer.
We are supporting NAMBA because it is independent but it is also the sole organisation working to support the views of individual mortgage brokers. Importantly, it is also independent of all lenders. While NAMBA’s campaign was delayed by press interest in specific individuals rather than its vision or strategy, we hope NAMBA receives a fair industry hearing. Its foundations are sound.
NAMBA has embarked on a publicity campaign to convince the market that it has the wherewithal to be an excellent and effective voice for the broker. To establish credibility, it is also critical that NAMBA secures close working relationships and strategic alliances with broker organisations such as AIFA and LIA and gain their support. In turn NAMBA must communicate with the CML and lenders.
Brokers need a trade body to represent the mortgage industry that is independent of lenders and NAMBA is the only contender for this role. It has over 400 supporting brokers as members and there has been a huge amount of market interest.
NAMBA has the potential to succeed and brokers should give it a chance to prove itself. Otherwise the views of small brokers will be squeezed by bigger firms. And that is a route the industry can ill afford to take.
Martin Maynard is managing director of Mortgage Next