After the new MMR rules are implemented next April, Sinclair (pictured) said lenders may find it difficult to operate the kind of product ranges they do now.
“They might have to reduce their product ranges as well, because some of them are far too complex,” he said.
“Particularly when they want to get to the point of going out to customers at the end of a particular incentive period and have to tell them all of their products in order for the customer to make a choice.
“That would be difficult for some lenders with the range of products they do.”
Speaking to the myhomemove conference in Warwickshire, Sinclair said that lenders faced a choice over what to do with customers who currently undertake a non-advised sales process.
“I think lenders have a choice – that might be giving up and going down the broker route or actually starting to think about outsourcing.”
He added that the MMR may also mean tighter compliance standards for small brokers to satisfy higher lender standards.
“I think lenders might demand more certainty around what the compliance small brokers have and we might see the arrival of what I call AR light, where the mortgage clubs introduce a compliance package that sits alongside the club to help give lenders comfort about compliance.”
