While the award to the FSA has created controversy, commentators have welcomed the news that the second-largest share of the cash, £300,000, will go to the Money Advice Trust (MAT), a charity that provides counselling and advice to people in severe financial difficulty.
Other beneficiaries include the Institute of Financial Services (ifs) and the Society of Mortgage Professionals (SMP) who will receive around £200,000 and £30,000 respectively.
Both organisations have received the money on the proviso they provide training which will improve the standard of advice given by the industry to the public.
The decision has led to a threat of legal action against the board by Network Data’s managing director, Richard Griffiths.
He said: “I hope the MCCB has taken legal advice. I regard this as a cavalier attitude towards brokers’ money.
“The board can hardly relish the prospect of being sued personally like those at Equitable Life who have had to transfer their properties into their wives names.”
Chris Cummings, director of the Association of Mortgage Intermediaries (AMI), expressed disappointment that so much of the surplus was going to the FSA and that no cash had been allocated to the Financial Services Compensation Scheme.
He called on the FSA to ensure any money it was allocated was spent in a clear and transparent way, and was seen to benefit the mortgage industry.
“We of course applaud the fact that some of the money has been given to charity and will be expecting a great deal of free training to be offered to brokers by those organisations who have received money to do this,” he said.
The FSA promised that if it received money from the MCCB surplus then it would use it to offset the future costs for mortgage firms.
At the time of going to press, the SMP and ifs refused to comment.
Robert Skinner, the director general of MAT, welcomed the news. He said: “This money will be spent on providing support and training for our front line money advisers.”
