Network Mortgage Promotions will not become a principal for its members under statutory regulation despite moves by competitors. Mortgage Promotions will instead provide its members with tools and support, for them to become principals themselves.
Nick Baxter, director at Mortgage Promotions, said: ‘All our competitors seem to want to be principals but we see our role as being here to help our members to cope with the situation and do not see any reason why anybody should be scare-mongered into becoming an appointed representative. ‘
In a bulletin sent out to Mortgage Promotions’ members, Baxter assured them they would be provided with compliance services and training and questioned the motives of bodies offering members appointed representative status. ‘I suspect their motives are largely driven by the additional control over their members that principal status will bring them,’ he said.
The Financial Services Authority (FSA) said the issue of distributors becoming principals was in its early stages, and that there will be one more consultation paper on the subject. Application packs will be released in the last quarter of this year, with applications for regulation beginning early next year. However, the FSA believes the issue needs to be at the forefront of the industry’s mind.
A spokesperson at the FSA said: ‘At the moment what firms need to be thinking about is what way they go and what the impact of that choice will have on their business. Now is the time to be thinking through this issue.’