The claim is based on the results of a survey carried out among SPML’s packagers and brokers. The respondents said that there will be fewer, but larger, packager firms, and the cost of fees paid to both the FSA and the Financial Ombudsmen Service, and additional compliance administration costs, will cause a number of brokers to leave the market.
Other findings included the news that over a third of all brokers are expected to become members of a mortgage networks, to benefit from the help, support and information that they supply.
Gemma Reece, in-house lawyer at SPML, said: "SPML canvassed opinions on regulations from brokers and packagers as part of our submission to the Treasury on the proposed regulation of mortgage advice. We believe that sounding our opinion at grass roots level is essential for the Treasury and FSA to formulate the regulation to best benefit all parts of the industry."
Stuart Aitken, Director of Credit for SPML said: "The likely contraction in the market will merely serve to enhance the business opportunities for those brokers that qualify.
"Results of the survey show that packagers believe that a large amount of brokers have not yet taken the exams and that many of them think it is too late to gain the necessary qualification. However, now is not the time for brokers to be sticking their heads in the sand. Instead, they must take the exams and make sure that they are first in line for the new business opportunities that will arise, should the results of the survey prove true. Further, the increased professionalism of the market will bring benefits to us all – lenders, packagers, brokers and customers alike."
