Mortgage lenders have expressed concern for the well being of intermediaries ahead of forthcoming mo...
Mortgage lenders have expressed concern for the well being of intermediaries ahead of forthcoming mortgage regulation as they fear some advisers will struggle to avoid drowning in a sea of bureaucracy.
Findings surfaced in a survey of leading UK mortgage lenders, held by IT automation specialists, Focus Solutions Group, and IT solutions provider Dunstan Thomas.
All of the lenders surveyed expressed concern about the amount of additional paperwork and costs involved in a sale, as a result of planned CP98 requirements.
Two-thirds of the lenders believed smaller intermediaries, in particular, could be washed out of the mortgage market by the anticipated additional costs incurred in order to achieve compliance.
A spokeswoman for the FSA, however, stresses its new regime puts an end to the spectre of possible dual regulation, arguing some costs will actually fall away, such as anyone paying into the Council of Mortgage Lenders for the mortgage code.
She concedes there will obviously be costs for regulation but added they have yet to be determined as costs will be based on how the FSA feels regulation has to be set up to protect consumers.
The Government's December announcement that the FSA is to regulate mortgage advice has bought intermediaries more time to prepare for N3 which isn't going to happen now until at least 2004, with a lengthy consultation period underway.
It's early days - but for intermediaries anxious to adopt an early plan of attack there are plausible choices.
Investment in technology to offset possible extra administration costs is one option. Focus Solutions, for example, alongside the portals, will readily provide first-hand evidence of cost reductions seen in the life and pensions sector thanks to the implementation of its IT solutions which enable the automation of sales processes.
Another consideration for the intermediary is to prioritise strengths and outsource non-core activities, such as administration, to third-party providers.
The FSA spokeswoman was not so quick to endorse this 'early bird catches the worm philosophy' though. She said whether to take action now is really a question for the intermediary. She reasoned that until regulation is set out it'll be difficult to decide what an intermediary needs to be doing.
Regardless of what initiatives are put in place many would argue that the more time the intermediary invests improving customer relationship management before the new regime comes into effect, the greater their competitive advantage will likely be.
For more information on Focus Solutions please visit www.focus-solutions.co.uk.
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