Mortgage regulation will bring the death of mortgage clubs, claims Whitechurch Network chief executive Kean Seager.
Seager says mortgage clubs are in a frenzy, trying to come up with a unique selling proposition post-regulation and the solutions they are coming up with will not be attractive for most advisers.
He believes that in an attempt to keep control of their adviser bases, some mortgage clubs are preparing to provide compliance services.
But Seager adds that many clubs will stipulate that advisers must sign exclusive agreements with them, barring them from doing business with other clubs and life offices.
He says the concept of a mortgage club will qui-ckly die as advisers will not want to limit their businesses in such a way.
Seager says: “Presently, lenders can get away with it because their advisers can join as many clubs as they wish. But these clubs will quickly fade as advisers realise that lenders will try to make them tie.”
Mortgage Intelligence managing director Sally Laker says: “Mortgage clubs will continue to provide a valuable service to brokers that decide to go directly authorised and are self-sufficient. It is wrong to assume that there are no brokers.
“Most clubs have revisited their position in view of forthcoming regulation and have stated their intention to become a principal for mortgages for appoin-ted representatives.”