Each week, we also round-up the best comments, emails and letters to the site and pick one reader contribution as our Star Letter. This week’s award goes to:
Two-thirds of brokers avoid secured loans
In my opinion, I believe the main reasons are either:
1. Too much first charge business caused by MMR and borrowers finding lenders are now less able to deal direct.
2. Many occasional introducers of secured loans will lack the knowledge to be responsible for the advice and so steer clear to avoid a breach on their main business.
3. Lack of guidance from the OFT and FCA on the regulatory move and simple marketing telling us what we need to do it.
Many brokers refer 1-5 cases per year so may have struggled to see the benefits of paying more money. On the latter point, if two-thirds of brokers had not renewed their licences (many will have been forced by their network), this could have caused a major rethink for the FCA when they realised the expected revenue from fees was too low and that the move had denied borrowers the choice of a second-charge.
Personally, I feel it is unreasonable we need to hold a CCL if we purely refer the client to another broker that undertakes the advice.
Last year, I suggested secured loan brokers look to create networks to allow advisers to register as ARs (perhaps under separate entities) and that way the secured loan brokers can secure their distribution, handle all the regulation, be responsible for the advice, oversee the quality of leads and reduce the effort and costs for occasional referrers such as me.
Arron – Temple Capital
