A poll of 12,000 intermediaries throughout the UK by NGM during October has discovered that one out of every three advisers has failed to submit a formal application to the FSA to become a Principal, or a network thereby allowing them to trade as an AR or Introducer AR.
The poll confirms major industry concerns that significant numbers of advisers face the real prospect of being unable to trade from 1 November.
“The industry has failed to educate the mortgage introducer community – and there could be a heavy price to pay by all parties,” commented Tony Yorke, NGM’s director of marketing and business development. “The stark reality is that there is not enough time available to process the thousands of advisers who have yet to decide exactly where their future lies.
“Those that are keen to pursue the Directly Authorised route will have their efforts frustrated by the FSA; those that are seeking AR status will face lengthy delays due to the length of time it is currently taking to receive essential information from third party agencies. The fact is that too many people have left it too late in the day to decide where their future lies.”
The reasons cited by advisers for a delay in deciding what option to take included:
• Lenders offering little or no practical advice to intermediaries
• Confusing and mixed messages being delivered by the rapidly
expanding mortgage network community.
• A general lack of understanding about the responsibilities placed on the
intermediary to be prepared for Mortgage Day.
• An “understanding” that the FSA would delay the introduction of M-Day
until the second quarter of 2005.
• The belief that the FSA’s statutory mortgage regime didn’t apply to
intermediaries who specialised in non-conforming lending.
Added Tony Yorke: “The industry has to learn from the many mistakes that have occurred in recent months in relation to readying the intermediary community for the onset of regulation. Too much inconsistent information has been circulated by parties who have their own interests at heart – not those of the would-be Principal or AR.
“Going forward, it’s important that the industry unites to tackle the major issues that affect us all. If we don’t, the distribution channels of lenders and networks could be crippled and intermediaries will face the prospect of having no income. It’s a very high price to pay if we continue to operate in a dysfunctional manner.”
NGM’s market research campaign took place during the period 1-30 September 2004.
A third party call centre, commissioned by NGM, sought the views of 11,768 mortgage
professionals during this period.
