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FSA foresees fallout in adviser numbers

It is unlikely that lenders will be forced to offer borrowers advice when taking out a mortgage, according to FSA director of high-street firms Sarah Wilson.

Questioned by Council of Mortgage Lenders director general Michael Coogan at last week&#39s Building Societies Association conference in Bournemouth, Wilson also quashed concerns over the impact of regulation on small lenders. She said: “There is no reason to believe regulation will have an impact on the number of lenders.”

But she admitted that intermediaries are set to see their numbers cut with the advent of regulation. Wilson said: “It is unlikely that regulation will have no impact on the number of intermediaries, especially small intermediaries.”

She said any fallout from the market will be the result of some intermediaries not meeting regulatory standards and others not applying for authorisation. Wilson also said intermediaries will have to make “the difficult commercial decision” of whether to be an appointed representative of a firm or directly authorised.

She said the FSA is yet to decide if an appointed rep can only have one principal, as in the investment sector, or be tied to a number of firms, the result of which could be “significant for the mortgage market”.

She confirmed that comparative tables are to be published towards the end of this year as planned and that revised proposals for the tables would be issued next month.

Another issue that Wilson said the FSA is consulting on is the capital-adequacy req uirements for intermediaries. She said: “We have questions but relatively few answers. But the areas we are consulting on should give a clue of what the market will look like.”

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