Everyone has a slightly different view of the association, and I value all feedback on what people deem to be our strengths and areas for potential improvement.
Vic Jannels (pictured) is chief executive of the ASTL
I have now been in situ as CEO of the ASTL for a few short weeks, and during that time i’ve had the opportunity to talk in depth with some of our members, associate members and other stakeholders within the short term lending industry.
As you might expect, everyone has a slightly different view of the association, and I value all feedback on what people deem to be our strengths and areas for potential improvement. There have, however, been some consistent themes and one of the most notable points of agreement has been the power and value of our Code of Conduct.
The ASTL’s Code of Conduct has been a key tenet of the association since its beginnings in 2008 and prescribes expected standards for all members.
When Benson Hersch took the role of CEO in 2008, the Code of Conduct was expanded to reinforce a commitment to transparency, and it is reviewed regularly to ensure it remains relevant and consistent with the highest of market standards.
Some important elements of the Code of Conduct include:
- Members should not acquire business using methods considered to be oppressive or dishonest.
- Terms and conditions should be transparent, fair and reasonable.
- All costs and fees to be charged should be disclosed before carrying out any lending business.
- Members should treat customers and all other third parties fairly and courteously.
- All advertising must be clear, fair and not misleading.
- All fees and commissions or other financial benefits payable to a financial intermediary, broker or third party in connection with the customer’s loan, should be disclosed to the customer.
- All members should have a complaint handling procedure compliant with the requirements of the Financial Ombudsman Service.
The eagle-eyed amongst you would have noticed the principals of the ASTL Code of Conduct align closely with the principles of FCA regulation and, in a market that is split across regulated and non-regulated activity, this code can provide consistency and reassurance for intermediaries and customers.
There were some noises last year about the potential regulation of commercial bridging, which seem to have dissipated and while this area remains unregulated, it can be potentially confusing and intimidating for brokers who are unfamiliar with the sector.
After all, in an unregulated environment it is possible for a lender to set up without proper processes or adequately trained staff and standards of conduct, transparency and professionalism can vary dramatically. We trust that this is unlikely to be the norm, but the code helps to underpin the need for consumer protection.
Hence, the importance of the ASTL’s Code of Conduct. It imposes a form of self-regulation that can provide and demonstrate a kitemark of quality.
It means brokers and their clients can have confidence that if they choose a member of the ASTL, the lender will subscribe and adhere to certain standards of behaviour.
In lieu of full market regulation, the ASTL Code of Conduct sets the tone for the industry and I would suggest that ASTL membership is something that all brokers should look for when choosing a lender.
And while the prospect of regulation may not be on the immediate horizon, a collective commitment to quality lending amongst lenders will help to stave off any potentially heavily demanding legislative intervention in the future.
I am not necessarily against regulation, but it is never designed for those lenders that follow best practice. When regulation arrives in a market, it is to target the bad practices and consequently it can be disruptive. So, as an industry, we have a collective responsibility and incentive to ensure we operate to a code of conduct that protects our investors, our borrowers and our sector.
This isn’t just a defensive manoeuvre. The more lenders that align to the high standards set by the ASTL’s Code of Conduct, the more we can enhance the reputation of the market and this can help to stimulate the growth of our sector.
Another area of consensus that has emerged from some of my conversations is that bridging lending will only truly realise its full potential for growth if more brokers enter the market.
The market has evolved to become a very useful source of funding for a number of investment and business scenarios, and the competitive lending landscape has helped to make bridging finance more attractive for borrowers.
But, when it comes to distribution, we are still limited to a relatively small number of intermediaries (pro rata) and this is impeding the growth of the sector.
It is clear that we can do more to promote the ASTL Code of Conduct to more brokers and that, in doing this, we can demonstrate that bridging is a market in which they will feel comfortable providing advice and with which they want to be associated.
In order for the Code of Conduct to be meaningful, of course, we must police it to ensure that all members are adhering to the standards set within the guidelines and this is something that is very much on my radar.
So, if you find yourself having to choose between bridging lenders for your clients, ask yourself whether those lenders are members of the ASTL.
Our Code of Conduct is a kitemark of quality that can give confidence to you and your clients.
