Increasing numbers of mortgage brokers are getting their houses in order and plan to sell their companies, according to business listing service Broker Exchange.
Sarah Ashman, founder of the Broker Exchange, said: ‘There is clearly still a great deal of concern about the future of the IFA sector, and this is now spreading rapidly into general and mortgage broking markets. We had noticed that everything had calmed down a bit recently as intermediaries start to focus on making plans for the future. But since the latest reports of falling profits and share prices it has all kicked off again.’
She said there were many reasons why businesses may want valuations other than to sell up, such as refinancing, restructuring, expanding through acquisition or tax planning.
To meet the demand, Broker Exchange has done a deal with Financial and Taxation Consultants (FTC), who will help provide the requested valuations.
Bruce Priday, chairman and managing director of FTC, said: ‘It is more important than ever that intermediaries make clear plans for the future. By working with Broker Exchange we are aiming to help IFAs and brokers to make more informed decisions about their future.’
Chris Cummings, director at AMI, said this consolidation was to be expected in light of forthcoming regulation, and would only be a concern if it interfered with the smooth running of the industry. He commented: ‘The next 12-24 months will see a period of industry consolidation. While the number of individuals involved in giving mortgage advice may not change, the number of firms is likely to decrease ‘ as they look for an appointed representative solution or sell up.
‘AMI is lobbying the FSA to ensure that regulation is actually delivered with a light touch and proportionality, that has been promised. The worst case scenario is that regulation distorts an effective, functioning, dynamic and innovative market ‘ this would be to the detriment of consumers.’