Norwich Union has sparked debate by advising mortgage brokers not to panic about regulation. According to its latest Mortgage Club newsletter, there is still plenty of time for brokers to consider their options under forthcoming Financial Services Authority (FSA) regulation.
Frank Thurlby, head of compliance at packager Genesis Home Loans, is worried brokers may overestimate the time remaining to make up their minds about their response to mortgage regulation. He said: ‘While most brokers are aware of the main dates on the regulation timetable, many still do not appreciate the time needed to appraise the various options and the preparations necessary to pursue their chosen option. For instance, if a broker decides to become directly authorised, he needs to be planning and preparing now. All of his compliance and sales procedures will need to be documented before he makes his application to the FSA.’
Rebutting the accusation, John Whitehead, technical manager at Norwich Union, said: ‘We are not suggesting brokers should do nothing, but there are a lot of companies, such as ourselves, still preparing the proposition they will offer brokers, these will emerge in the next few months. There are people making all sorts of promises, and a lot of scare-mongering, before the final pieces of regulation are available. If you sign now and find better offers later you would kick yourself. The message is: decide what you are likely to do now, but wait until you have all the options before making a final decision.’
Genesis has already declared its intention to become a directly authorised principal and develop a network of appointed representatives.