Legal & General (L&G) Mortgage Club has announced it will be offering brokers support under the imminent Financial Services Authority’s (FSA) regime. The club has provisionally declared that it will become a network, acting as a principal for brokers who wish to become appointed representatives.
Graham Newitt, protection and housing director at L&G, said the process of gearing up was already in hand. “We have to wait for the FSA to release the final regulation but there are enough certainties that we can now begin with the basic building blocks. We want to communicate that we have actively begun doing something.”
L&G has begun to invest in new point of sale technology and is putting together a company infrastructure in order to aid brokers with both the initial application, and ongoing training and compliance needs. Intermediaries will see new versions of software by the end of the year and L&G will add modules as the final rules are announced.
The club will be charging for the service. Newitt said: “We believe that to do the job properly involves cost. Where L&G wins out is that it does not have to make a profit on these functions and that we have vast economies of scale when implementing them.”
Commenting, Peter Brodnicki, chief executive of the Mortgage Advice Bureau, said: “Brokers joining networks may find that they are forced to adopt the network’s ways of doing things. I believe networks as a whole are likely to be a lot more prescriptive after regulation.”
He added: “It will be interesting to see if L&G push for the whole market or if it will require a minimum size for a brokerage to join.”
L&G itself suggests brokers should sit tight for the moment. “There is not enough concrete information from the FSA at the moment to evaluate any offers. This is the time to gather information but it will be two or three months before meaningful comparisons can be made,” said Newitt.