The problems that Inter Alliance is having collecting its intermediaries’ procuratuion fees, highlighted in this issue’s lead story, are a clear indication of the inherent problems faced by large organisations in policing their numbers. How large-scale this problem is for the networks remains to be seen, but it acts as a useful insight into the mammoth task facing the Financial Services Authority (FSA).
The argument over the FSA’s regulation being too prescriptive still rages, and it is difficult to know if companies would be better off given guidelines on what is required, as opposed to exact rules. The different responses over the FSA’s exam requirements are a fine example of this. Whatever the final rules published in October may be, responsibility is going to lie, as always, with the market practitioners to make sure they are acting within them, and there will always be those wishing to cut corners, and avoid costs.
The issue of cost for intermediaries is slowly becoming apparent. The FSA has published its initial figures, and networks are now beginning to detail exactly what they will be charging intermediaries for compliance services, support and appointed representative status. For many the figures detailed by Mortgage Intelligence will be a shock, and many will be reaching for pen and paper to work out their own calculations.
This is good news, and will help to kick start those with a wait-and-see approach to regulation, to begin to find out exactly what costs will be incurred, and the most cost-effective options available to them. There is no rush for them to sign up to any particular offering, but by doing their own sums and seeing how much regulation will add to their bottom lines, intermediaries will be in a much better position to evaluate the offerings that are emerging.
Extra costs will put extra strain on intermediaries, but they can take heart from the increasing volumes of business that are being done, and the bumper July lending figures published by the Council of Mortgage Lenders.
Edward Murray, news editor