Next year's pending FSA takeover of regulation of the mortgage market will cost the industry jobs an...
Next year's pending FSA takeover of regulation of the mortgage market will cost the industry jobs and cut down on consumer choice, according to a new study prepared by the Institute of Actuaries.
Drawing on comparisons with the life industry, the report's authors say that compliance costs and the costs associated with moving over to the new regime will force smaller and less efficient firms out of the market.
Costs associated with mis-selling will also spiral as the FSA seeks to stamp its mark on an industry that is difficult to control at the edges.
Companies that cannot absorb these additional costs, or that do not bring their levels of customer service up to scratch will lose out, the report says.
There is still some room for smaller and medium sized companies in the new world, however: specialised lenders, and aggregators providing support services to intermediaries.
Looking ahead to the October 2004 deadline, the report says that lenders need to develop new market plans, identify gaps left in the market by potential losers, and look to develop "key intermediary accounts".
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