The FSA has a large remit. We can all sympathise with that and are willing to compromise in whatever way possible to help the FSA with its supervision.
There are constant talks between trade bodies, associations and committees to facilitate the smooth running of the regulation of the financial services industry. After all, we are all aiming for exactly the same thing – a safe environment for customers and a clear, transparent market in which brokers are remunerated appropriately.
So, why did one mortgage firm receive four thematic visits in the space of 12 months, while constantly being told after every visit it had not flouted any rules, and was treating its customers fairly, having documentary evidence of this at every turn?
It appears the regulator has got a bit of a diary problem. It had inadvertently visited the same firm due to miscommunication between different areas of the same team, leaving the firm wondering what in on earth it had done wrong. This was until it asked. The regulator had no idea the firm had already been visited a number of times by the same department.
How many times have brokers been told about their record keeping, making sure everything can be seen in writing, upheld by dates, times, numbers and so on? Surely, this is quite difficult now to take this seriously. The FSA would respond by saying, not in so many words, the regulator is not regulated. But perhaps it needs to lead by example.
Similarly, this disorganisation – for it cannot be described as anything else – is hardly welcome in an environment where time is becoming more and more precious to those operating in the mortgage market.
Sub-prime issues are putting an enormous strain on the resources of all firms. Lenders, packagers and brokers are having to assess their positions in this market and are now looking at headcounts, business strategies and some, their survival going forward. Most firms simply cannot afford to host four consecutive visits from the regulator without good cause.
The FSA has very kindly turned up to our roadshows, The Mortgage Event, over the past three weeks and every representative has kindly answered questions from the floor. Many have surfaced about the supervision of firms and the regulator’s over reliance on brokers to help it do its job.
In particular, questions from brokers were related to estate agencies and the manner in which the intermediary community feels these agencies are aggressively forcing clients to use their broker arms. The FSA has urged brokers to continue whistle-blowing on any unethical practices but there was a general stir that an association of its size, with all the power of the Treasury behind it, should be taking on this responsibility itself. And frankly, I have to agree.
Again, I reiterate our support for the FSA, but an over-reliance on the broker community in the supervision of firms is ultimately unacceptable. n
