The move, which highlighted the regulator’s tougher stance on compliance issues, has resulted in intermediaries looking at their procedures and seeing how they can best protect their business.
With Retail Mediation Activities Report’s (RMAR) also being completed at this time, the focus on compliance means many intermediaries are looking at the possibility of moving to appointed representative (AR) status in the near future.
Bill Warren, director of Complete Mortgage and Loans Service, said: “We have had an upturn in AR enquiries in the last three weeks, which I think has been a knock-on effect from the Rainbow case. Also, the fact that it is RMAR reporting time means people are realising they need protection and many are turning to networks.”
Warren’s sentiments have been backed up by other mortgage networks, with many seeing this as only the beginning as the FSA takes a firmer stance on inadequate compliance.
Tony Jones, managing director of Pink Home Loans, said: “We’ve certainly seen a very high level of interest and I’m not at all surprised if the RHL decision was the reason. If a broker sees that then they are likely to be worried and look around at their options.”
Frank Thurlby, compliance director at the GHL Group, said brokers were starting to realise the extent of regulation.
He explained: “I can’t say we’ve had a massive increase in the number of ARs recruited but I can say we now have more ARs going through due diligence. It is right the regulator is tightening its grip and the honeymoon period is certainly over. Those who haven’t faced up to compliance issues before are now having to.”
