All mortgage sales staff will have to be FSA-approved under new FSA plans announced today, or face a penalty
They will be required to demonstrate they are ‘fit and proper’, helping to clamp down on mortgage fraud and enabling the FSA to monitor individuals in the mortgage market.
The Council of Mortgage Lenders had argued that branch based advisers should not be on the list because they are already subject to sufficient compliance standards within lenders. But the Association of Mortgage Intermediaries argued that the approved persons register should apply to the whole market.
Titcomb said at the CML conference in June: “We have to ask what the point of that half-hearted approach would be? If we want to have proper oversight of individuals in the industry, so that we can combat fraud, so that we can take action against individual advisers and so that we can raise standards, then we must have oversight of the whole industry and those who work in it, and not just part of it.”
Robert Sinclair, director of the Association Mortgage Intermediaries, said: “AMI has always supported there being a register of advisers who give advice.
“We remain concerned about the depth and scale of the CF31 proposal, which is a fully blown authorised person function.
“We have yet to be convinced that the requirements as proposed put the status of mortgage advisers as having a greater risk to consumers than client money holding IFAs, reflecting the level of criminal record searches carried out.
“However AMI welcomes the fact that the FSA are including all those who are involved in dealing with mortgages with consumers. Delivering the level playing field is exceptionally important.”
The timeframe of the application process is initially confirmed for early next year, with the FSA expecting to accept applications from the 31st March 2011.
The cost of implementation of the AP register, which AMI and the Council of Mortgage Lenders have expressed serious concern over, is estimated to be nearly £14 million for the industry.
The FSA statement said: “The total one-off cost associated with extending the AP regime to cover the relevant activities will be £4m to £5.5m for the FSA, and £9.4m to £13.8m for the industry.”
The regulator estimates that 20,000 advisers and arrangers will be affected, and the number of lender staff will be around 11,500.
Ed Harley, director of mortgage policy at the FSA, said that as ever, cost would be apportioned to the industry in a way that was consistent with the FSA’s fee-based approach. He said: “Costs will be commensurate to supervisory effort.”
