The research carried out by MGM Home Finance, the mortgage services subsidiary of MGM Assurance, also revealed that 14% of brokers remained undecided about whether to be independent or tied – with some unaware of the April 30th deadline.
Of those questioned, at Mortgage Expo in Manchester last week, 52% stated they had applied for direct regulation, 34% said that they would join a tied principal and of these only 10% had made a decision so far as to which one.
When questioned about regulatory influences more than 56% of brokers felt that the FSA would progressively clamp down on selling practices such as self-certification mortgages shortly after taking charge.
Interestingly, some brokers felt that this was entirely the lenders responsibility as opposed to their own.
The survey also showed that 89% of brokers expected their income to rise or remain the same after regulation.
The main reasons cited for rising income was a more professional image of brokers as a result of regulation and the expectation that there would be less mortgage brokers trading and therefore more business for everyone.
Stephen Maskens, Manager of Home Finance commented, “This worry about networks failing was one of the reasons cited for the delay in choosing a principal even though regulation is looming. There seems to be a clear division now between direct and tied and once that decision is made there is little benefit delaying an application.
“A broker should satisfy themselves that there is sufficient capital backing to a firm along with good regulatory experience, that the terms are acceptable and, just as importantly, that they feel happy with the ethos of the company.”
With regard to broker beliefs about increased FSA legislation, Maskens said: “Our experience in investment regulation has taught us that the FSA will (rightly) expect high levels of professionalism from mortgage brokers.
“Correct interpretation of the basic MCOB rules and FSA principles cannot be understated if the industry is to avoid retrospective review in the future. Your chosen principal needs to be experienced enough to do this”
Results of the survey can be found on the MGM Home Finance website at www.mgmhomefinance.co.uk or by calling 0845 3001069
