Malone says the FSA’s announcement that some building societies may be forced to operate on simpler business models may push them to strike up partnerships with mortgage advisers to refer on any business they are prevented from writing such as self-certification, sub-prime or buy-to-let.
He says: “In the near future – next year or the year after – it would not surprise me if a number of the big institutions look at the HSBC model and seek to forge links with the directly authorised community. I think it will be with DAs because they are free to choose the product types whereas ARs might be more restricted.
“A marker has been put in the sand by the likes of John Charcol and HSBC and a few other key players like Savills and London & Country that have relationships as well. I can see that becoming more the shape of the marketplace. If we do have a limited number of players and if you look at the way that the FSA may restrict institutions from going beyond their abilities that gives further credence to this idea.
“If they wanted to go beyond their benchmark they would have to outsource and that is where IFAs could come in. Where you may find that building societies no longer have the ability to do certain types of lending, maybe buy to let, sub-prime, self-certification, they will call on the intermediary community.”