Stephen Atkins is managing director at Freedom Finance. He is the representative for large companies as part of his role on the Association of Mortgage Intermediaries (AMI) Board.
Having been involved with the mortgage market ‘for most of his life’, Atkins was invited to help with the formation of the Mortgage Code, before being approached in 2001 to help form the National Association of Mortgage Brokers and Advisers (NAMBA). “I had seen the effects of regulation on other aspects of the market, and people realised how much of an impact it would have on the mortgage market,” he explains. “Regulation had a massive impact on the life sector, and I could see how the mortgage market would change as a result of the Financial Services Authority (FSA) becoming involved.” Following the conception and launch of AMI, Atkins continued his role, as part of the new organisation, on the AMI Board.
AMI is now in its third year, and with 17,000 members stretching across all sectors of the mortgage market, Atkins believes the strength of the organisation is due to the experience of the Board in the mortgage market, with Chris Cummings, director-general of AMI singled out for praise. Atkins says: “Since Chris Cummings took charge of AMI, the trade body has gone from strength-to-strength and AMI has real power and a good reach across the mortgage market. The original NAMBA Board had a good relationship with the FSA, but this relationship has grown considerably over the past few years since Chris Cummings took over, bringing an extra level of communication between the trade body and the regulator.”
Market changes
Atkins believes the market has got a rough ride ahead of it over the next few years, with the introduction of Home Information Packs (HIPs) into the market, continued pressure to adapt a more European model with European rules and guidelines, in addition to new entrants into the market. He says: “I am concerned about the changes in Europe that will no doubt impact on the market. The Markets in Financial Instruments Directive (MiFID) is a major concern. Although it is not meant to affect intermediaries and firms, the commission and client fees aspects are a worry if they overlap and could make life quite complicated.
“Possible regulation of second charge loans is also a worry and, with over 4,000 brokers admitting this sector makes up part of their business, there is no doubt the FSA will take a closer look at this part of the market.”
On the subject of HIPs, Atkins argues AMI is in a difficult position and will have to think hard about its position. “AMI has quite rightly refused to get involved with any commercial level.” However Atkins realises AMI may have to act, especially following the announcement that supermarket ASDA is to offer a HIP and estate agent proposition. He says: “I can’t really believe that ASDA will charge a 1 per cent fee and give a free HIP, then walk away from the client. People aren’t entirely sure about HIPs as it is, so for new large companies to launch their propositions means brokers have even more to fear.”
For the future, Atkins believes AMI will have more to do in the areas of ‘Treating Customers Fairly’ (TCF) and in the run up to the introduction of a principle-based approach to regulation. “Small firms must be worried by the affect of a principle approach as they can’t be sure if they are doing things right,” he says. “AMI’s next challenge is to give guidance on moving to this approach and we have already started looking at this in preparation.”
Atkins, however, says the impact of technology on the market has helped intermediaries and clients, speeding up the time spent per case and helping with record-keeping and other issues. “The progression of technology in the marketplace has been the most significant enhancement and I can only see this continuing. Many people were wary at the beginning but it is second nature now.”
AMI benefits
Atkins believes AMI serves its members well, and argues it offers a valuable service. He explains: “Some brokers might decide against joining AMI, but for its inexpensive membership, members get the opportunity to voice their concerns to a trade body that will listen, and act. There is no opportunity for self-interest on the Board and everyone is committed to helping intermediaries.”
Despite its impact on the market, Atkins admits the trade body is unlikely to receive recognition from the regulator. “The FSA is never likely to praise AMI but the relationship has proved successful,” he explains. “Brokers are now sitting more comfortably with regulation and this is down to AMI. A lot of the frequently asked questions on the FSA website have been discussed with AMI and are issues the members raised. There is also a further level to AMI as some of the Board members sit on other FSA business panels, which gives AMI further representation in the market.”
With Atkins currently up for re-election, he believes brokers should not lose sight of how far the market has come, but how much it is still to be moulded by further advances in the market, with European directives, HIPs and principle-based regulation all on AMI’s, and intermediaries radar. “Brokers should feel more comfortable with regulation now, 18 months on, but they need to keep aware of future changes, a role that AMI does well.”
