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Brokers feel full force of M-Day as profits dwindle

Three out of four brokers say M-Day has made their jobs more difficult and profitability is decreasing, according to Alliance & Leicester.

One year into mortgage regulation, brokers are still experiencing frustrations and lower profits, even more so than they reported to be the case 100 days after M-Day.

Fifty-eight per cent of brokers are this month reporting falling profits compared with 44 per cent 100 days after M-Day.

Fifty-one per cent of brokers are spending more time on maintaining business levels compared with 47 per cent 100 days after M-Day. Fifty-three per cent now say KFIs provide no real benefit to consumers – a 6 per cent increase on the figure 100 days after M-Day.

Eighty-one per cent say the sales process now takes longer, with 49 per cent saying it takes more than an hour-and-a-half. Eighty-two per cent of appointed representatives say their jobs post-regulation are more difficult compared with 72 per cent of directly authorised advisers.

More brokers in the Southeast are feeling the squeeze on business than those in the Midlands, with 62 per cent and 33 per cent respectively, saying they need to increase turnover to improve profitability.

A&L head of intermediary mortgages Mehrdad Yousefi says: “Research by Alliance & Leicester into the effects of M-Day showed that brokers were struggling 100 days after regulation, especially with sustaining profitability and dealing with a more lengthy sales process. It is clear from our research findings that, a year on, brokers still have some genuine frustrations and many are still experiencing problems.”

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