There is an underlying thread running through a lot of the changes currently taking place in the industry which suggests that the number of broker firms operating in the market is expected to tumble in the next few years, unless they join a larger organisation.
It must seem that mortgage brokers cannot move without being warned over how the structure of the intermediary market will be forced to change over the next few years. Whether it is concerns over capital adequacy requirements, worries that statutory regulation will overburden firms with compliance documentation or even fears that brokers will not pass the compulsory exams before the New Year’s Eve deadline, it seems that doom and gloom threatens from all sides.
But small independent brokers are the backbone of the intermediary sector and it would be a loss to the industry if they were to start disappearing from the high street.
As new broker networks emerge, and a handful of existing ones are announcing their grand plans for expansion, the role of the independent financial adviser need not necessarily be under threat. But mortgage brokers must come together if they are to survive and even flourish post-2004.
One of the main barriers to progress, is that the small broker on the high street does not necessarily know many industry ‘colleagues’ from other firms and so brokers are not coming forward to argue their case collectively.
As a result, membership of the proposed trade body, the National Association of Mortgage Brokers (NAMBA) has grown slowly. But now, with the backing of the Association of Independent Financial Advisers (AIFA), it should be clear that this is an organisation that is serious about representing mortgage brokers, whatever their size. If AIFA can be a strong voice for financial advisers, then there is no reason why NAMBA cannot now go on to do the same for independent mortgage brokers.
Sadly, it appears that even with AIFA’s support, NAMBA may not have the backing of the majority of mortgage brokers by the end of the consultation deadline concerning the regulation of advice. Therefore, it is imperative the industry proves its detractors wrong and brokers take it upon themselves to respond to CP146 and ensure that NAMBA has their best interests at heart.