This is according to TMA’s inaugural Distribution Indicator, which suggests that over three quarters of directly authorised brokers expect the MMR to have such an impact.
When asked the question as a result of the MMR what do brokers expect the biggest market shift to be, 76% said that increasing numbers of intermediary firms would be forced from the market. 12% suggested that the biggest shift would be from an appointed representative (AR) to directly authorised (DA) while 8% reported that DA to AR would constitute the largest shift. The final 4% said that increasing numbers of firms would have to consolidate as a result of the MMR.
TMA’s monthly Distribution Indicator also found that when looking to a distribution partner, whether it be a mortgage club, a network or a packager, just over half of those interviewed (52%) stated service standards as the most important element. 24% underlined that proc fees were the most important; 12% pointed to the size and scope of the lending panel; 8% said the range of ancillary services on offer and 4% highlighted the financial backing/security of the partner as being the most important element.
When asked to highlight the greatest challenges facing directly authorised brokers in the current market, 36% responded that tighter distribution channels and the economic climate respectively were the greatest challenges. Surprisingly only 12% cited regulatory issues whilst 8% said the quality of lead generation and perceived FSA pressure to join a network were the largest obstacles.
Commenting, Phil Whitehouse, head of TMA, said: “The results of our inaugural Distribution Indicator regarding broker numbers are concerning but not unduly surprising. Figures from The Association of Mortgage Intermediaries show there were between 30,000 and 32,000 brokers at the peak of the market, this contrasts sharply with the figure the trade body stated three months ago which was only in the region of 12,000.
“This latest figure is a debatable one with some suggestions that the broker community might even be less than 10,000. But what is evident is that the brokers interviewed certainly don’t believe the MMR is doing the intermediary market any favours.
“The MMR is, unsurprisingly, an ongoing concern for brokers and with this is in mind it is up to all those operating within the various distribution channels to offer a larger degree of support to brokers than ever before.”
