Confusion over who is ultimately in charge of mortgage regulation is an unwelcome distraction, but it seems inevitable at the moment as the disparity between the rules set out by Financial Services Authority and those proposed by the European Commission look set to clash again next year.
The latest issue is that of distance marketing which aims to set out common rules across Europe regarding the information given to consumers before they purchase a financial product by phone, fax or internet. The problem in the UK has arisen due to the timing of its implementation on 9 October next year, a full three weeks earlier than Mortgage Day, and raises the question as to who will oversee the Directive in this period? The Treasury is now consulting on this, and although unlikely to prove disastrous, it is yet another example of the problems caused by the apparent lack of communication between Europe and the UK over regulation of mortgages, and to whom advisers are ultimately answerable.
It comes as little surprise, therefore, that a growing number of broker firms appear to be looking to sell up before Mortgage Day next year and leave the market altogether. Research from Broker Exchange confirms recent speculation that regulation will lead to consolidation in the market, but it is still too early for firms to be making such decisions as the moment.
While the conflict between who and what will be regulated is a major concern, there is a long way to go before statutory regulation and there are a plethora of options for advisers. The latest proposals have come from Paymentshield and Inter Alliance, with two very different offerings.
Admittedly there is still a lack of detail as to what some of the proposed networks will offer in terms of support and pricing but this is starting to be fleshed out and the available options should soon become a lot clearer.
Ben Marquand, editor