W hen it rains, it pours. This is nothing to do with the miserable weather we have been witnessing over the past week. It is about news.
Following the debacle that was the Northern Rock situation, there was a danger the news pages would suffer from a certain malaise. However, never fear – there have been some crackers over the past week that have superseded the Northern Rock stories as if it was all a bad dream.
With little surprise to many, Stephen Knight, the former chairman of GMAC-RFC, announced he is linking up with another heavyweight of the mortgage industry, Martin Finegold, to create a vehicle for creating and acquiring mortgage lenders.
There are many personalities in the industry, most of whom are largely irrelevant to the average mortgage broker and distributor. At the end of the day, most brokers want to make sure they have the right products, they are regulatorily sound and they are remunerated sufficiently. However, Knight is different. As many readers know, he set up the first packager back in 1987, which was then acquired by GMAC a year later. He changed the face of the market, particularly when it came to technology and point of sale offers.
Checkmate Mortgages, the new Knight/Finegold venture, is proposing to not only launch intermediary and packager-only lenders but also bespoke lending propositions for large distribution groups. It will not be a year until we see the full package from Checkmate, but the market certainly needs some good news at the moment, and this move brings an air of innovation and anticipation, which many will be following closely.
The market was also subject to some rather sad news last week, as further redundancies were announced. Advantage in particular announced that up to 90 members of staff are under review with further announcements to come. This is never easy to hear – or report on – but now is the time to rationalise propositions and make these hard decisions, before the market makes the decision for you.
Last, the FSA has announced it is undertaking yet another series of measures to increase its contact with small firms, following research showing they are still struggling with the concept of treating customers fairly (TCF).
The FSA is introducing an ongoing programme of structured visits and telephone assessments to test the quality of management and progress towards embedding TCF. The results apparently will help inform its risk profile of individual firms. Be warned – the FSA has already set a deadline of end-December 2008, by which time it expects all firms to be able to demonstrate they are treating their customers fairly.
But wait a minute – have we not been through this already? The FSA has to repeat the same exercises again and again to find out why small firms are unable to demonstrate they are TCF-compliant. Some may decry this is a waste of money and the fees brokers pay the regulator. Others would question why brokers still fail in what should now be an embedded part of their business. n
