Whatever the problems created, it is better to know what awaits us rather than waste time in idle speculation. However, the document at nearly seven hundred pages is a lengthy tome that will take some time to digest fully.
“We welcome the simplification of sales into just two types - 'advised' or 'non-advised' - as a sensible move, which will remove an area of potential conflict with the public. The basic initial Key Facts document will replace the traditional Terms of Business letter, but the later PAI appears be a very extensive document, and will require a lot of information to be gathered before any productive work can be commenced on behalf of the client. In cases where speed is of the esence, this could slow down the process in the early stages.
“One important point for packager and brokers working in the non conforming sector is the requirement on debt consolidation. Here, a client must be supplied with alternative strategies and comparisons to securing the debt on the property. As many remortgages are expressly for this purpose, it may well have a negative impact on the level of business in this sector.
“The largest benefit to the industry will be stability. Knowing the framework of the future regulation will allow the industry to start serious investment in the development of systems to achieve compliance with the FSA. I believe that many small firms will be daunted by the prospect of operating within the FSA structure and will choose to let larger firms shoulder the responsibility. This will result in fewer, but larger firms who will all become more professional in their outlook, which will in turn be good for the customer. And this, it is clear, is where the FSA is leading us.”
