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Fears that small mortgage firms will be casualties

While some of the mortgage industry see no cause for alarm in the FSA&#39s sweeping proposals to scrap polarisation, others are warning it will drive small brokers from the market.

The mortgage sector is in many ways in a state of limbo waiting for meat to be put on the bones of the Treasury&#39s surprise announcement in December that the FSA will regulate mortgage advice from 2004.

Britannic Money chief executive Tony Ward says: “The lower-income end of the market may lose out as intermediaries that have traditionally operated in this area are unlikely to adopt independent status.”

But Scottish Amicable mortgage manager John Malone is playing down the impact, saying most independent mortgage consultants will remain impartial as there is no benefit in tying to a limited number of lenders.

He says: “Mortgages will not be affected. It is rubbish to say advisers will tie to lenders.”

The Mortgage Code Compliance Board is dismissive of the effect of the changes. Spokesman Brad Baker says: “The changes do not currently affect mortgages. Details on mortgage regulation are months away and I am sure will be developed in tandem with the changes.”

Council of Mortgage Len-ders spokeswoman Michelle Vosper says: “It will push some people out of the industry who do not have the technology and systems in place but it is quite early to say much on the effect.”

Broker London & Country head of compliance Patrick Bunton says: “The independent sector will shrink significantly as many IFAs will become authorised financial advisers to be able to take commission.”

The overriding attitude seems to be one of wait and see what the Treasury and regulator have in mind for the industry before coming out strongly for or against the changes.


Legal aspect

One very brief question. Currently, the Institute of Chartered Accountants and the Law Society only permit their members to deal with IFAs.It would be interesting to know whether they will in future deal with the new authorised advisers as well as IFAs? As far as I can tell, the new IFA will have a prescribed […]

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Axing polarisation will be last straw for many advisers

Many thanks for the rapid distribution of the news. Just when the public were getting to grips with the current polarisation structure, our regulatory friends at the FSA have had to find something to tamper with so that they could justify their employment.Oh well, resigned as we are to constant change, we will just have […]

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