Mortgage Next will only charge brokers a £75 fee+vat for submitting applications for appointed representative status, if they are doing so as a safeguard at the same time as submitting applications to the FSA for direct authorisation.
Justine Tomlinson, Marketing Director at Mortgage Next, said: “Research indicates that as many as 50 per cent of brokers may apply for direct authorisation. However, we believe this figure may reflect aspirational desires, rather than intent based on a full understanding of the facts. When brokers fully investigate the implications of direct authorisation, we suspect there may be a shift in favour of appointed representative status.”
Brokers applying for direct authorisation must submit their applications by the end of April if they are to be guaranteed an answer before M day, and by the end of March if they are to take advantage of early submission discounts. Late applicants will not be guaranteed an answer from the FSA by 31 October, in which case brokers will not be able to continue trading – the FSA is not granting any days grace.
Justine Tomlinson continues: “Small firms – i.e. less than 5 advisers – may find that direct authorisation is simply too onerous. Before making a decision to apply for direct authorisation, I strongly recommend brokers carefully read the FSA Handbook with particular attention being paid to the threshold conditions, capital adequacy requirements and risk management, all of which are easily downloadable from the FSA website: www.fsa.gov.uk”
“It makes good sense for brokers to also submit an application for appointed representative status as a ‘belt & braces’ exercise. For £75+vat they have the comfort of knowing that, if for any reason their application is turned down by the FSA, they have a fall-back position which will enable them to continue trading.”
Mortgage Next will be providing regulatory support to mortgage advisers irrespective of whether they become directly authorised or appointed representatives. Brokers requiring further information about products and services available from Mortgage Next, or information about its network services, can phone 01883 333100 or visit the companies website at www.mortgagenext.co.uk
