Smith, director housing & external affairs for Legal & General, was invited to speak about the new FSA regulation on MMR at the CML’s conference and exhibition yesterday. He said that the proposals contained within the new consultation paper, CP10/28 on distribution, published by the FSA earlier this week, may help to level the playing field between intermediary-sourced business for lenders and the costs of origination via their own branches or direct.
“What seems clear,” said Smith, “is that the combined costs of individual registration, full mortgage qualifications for all selling staff and the need to validate affordability and suitability in all sales - both advised and non advised - is likely to increase the costs of doing business direct for lenders.
“Any imbalance between the costs of originating business via intermediaries or branches will change and lenders may find it even more evident that intermediary distribution is cost-effective, flexible and capable of growth.”
