Firms responding to the AMI September Intermediary Census also highlighted the cost of compliance as a direct threat to business.
Previous Census results have shown that the majority of intermediaries welcomed mortgage regulation as a means of increasing standards, but key issues have yet to be resolved. Of the challenges arising from mortgage regulation, obtaining KFIs from lenders was highlighted as the biggest single problem, with24 per cent of respondents saying this has been the most troublesome issue for their firm.Record keeping (22 per cent) and regulatory reporting (also 22 per cent) were identified as the most difficult aspects of regulation. Obtaining KFIs from sourcing systems (18 per cent), and increased training and competence requirements (15 per cent) also rated high in terms of difficulty.
On customer service, the Census shows intermediaries are split in their views on the merits of regulation.While 41 per cent say standards of customer service and advice have improved as a result of regulation, 45 per cent say regulation has not made any difference and 13 per cent are undecided.
Intermediaries also expressed a broad range of views on the greatest concerns facing their businesses. The majority (52 per cent) identified the costs of compliance as a direct threat, while 26 per cent were most concerned by a possible slowdown in the mortgage market.
13 per cent expressed concern at reduced lender procuration fees, with the remainder concerned about falling house prices (3 per cent), client retention (2 per cent) and interest rates (1 per cent).
Intermediaries also acknowledged opportunities for their businesses over the next 12 months.26 per cent consider the introduction of fee-charging for their services as a major opportunity, with 25 per cent identifying expansion into commercial mortgages as another.19 per cent identified expanding their protection offering as an opportunity, with 14 per cent saying the same for personal loans.
Interestingly, just 1 per cent expressed their intention to expand into the lifetime mortgage market.This seems to confirm AMI’s view that intermediaries must address the increased training and competence, PII, and compliance requirements before offering advice in this area.
Ben Stafford, head of policy at AMI, said:“These are interesting indicators of the key day-to-day concerns of firms almost one year into regulation. It is clear that the industry needs to adopt a more coordinated approach to helping brokers produce KFIs for customers. Equally, firms’ communications with the FSA itself need to be made easier.Many have been confused by certain information requirements in their first RMAR return, and steps taken to address this by the FSA will be welcomed.”
The October Mortgage Intermediary Census is now live, with firms asked for their views on record keeping.To complete the October Census go to: www.mortgageintermediarycensus.co.uk
Stafford added: “It is vital that firms realise that comprehensive record keeping is in their own interests.Not only is it a regulatory requirement, firms are opening themselves up to complaints if they cannot clearly evidence the suitability of advice given to clients months and years after the event.”
