View more on these topics

Regulation will cut mortgage advisers by a third, says Pru

The number of tied mortgage advisers will fall by almost a third when full mortgage regulation is introduced as they shift to offering a wide range of loans, says Prudential.

Prudential Premier Mortgage Club national manager John Malone, predicting the shape of the market after the onset of FSA regulation in October 2004, says the proportion of tied company representatives will fall from 27 per cent to 15 per cent.

He believes this decline has already started as advisers which tied to life offices in the 1980s and 1990s to sell regulated products such as endowments are leaving to become independent brokers and advise on complex products such as subprime and lifetime mortgages.

Speaking at the Retail Fin-ancial Services Forum in London last week, Malone said he expects the total number of firms in the mortgage market to fall to around 9,000 from 13,000 and the number of advisers to fall to 30,000 from 40,725 as a result of increased costs and compliance after CP146. Depending on the outcome of CP121, he expects traditional IFAs to account for about 15 per cent of the mortgage market, down from around 37.5 per cent.

But Malone says the winners will be qualified mortgage brokers who will adopt the middle ground between IFA and tied to form about 65 per cent of the market.

He also believes “old-style” networks will lose out in favour of new networks dedicated to mortgage advisers which will have lower charges and can arrange cheaper PI cover.

Malone says: “The reduction will come from the tied and direct side and most intermediaries will either end up IFA or AFA, which may be much the same. The winners will be existing FSA regulated IFAs or AFAs and mortgage specialists who have invested in relevant technology and qualifications.”


Sippdeal – SIPPcentre

Friday, 1 November 2002 Type: Full Sipp Minimum investment: Lump sum £1,000 Investment choice: All Inland Revenue permitted investments except commercial property and trustee investment plans Charges: Initial £120 Commission: Initial up to 3%, renewal up to 0.5% Tel: 0870 7588859

Credit crunch

What impact will the new European directive on consumer credit have on remortgaging, equity release, offset and flexible mortgages it if comes into legislation as the CML fears?Charlesworth: Between the European directive and CP146, the equity-release remortgage market could be significantly compromised, with the biggest impact coming from the proposals in CP146. The concern is […]

FSA shifts risk from PI insurers to IFAs

The FSA is temporarily amending the PI regulations in a bid to entice underwriters back into the market as hundreds of IFAs face rocketing premiums or fail to get cover.But the modifications will prove controversial as the changes shift risk from PI insurers on to IFAs. Brokers may face excess charges for each individual complaint […]

Independent view

Much is made of the theory of efficient markets and how the system grinds to a halt if both buyers and sellers cannot be matched together.Nowhere has this been more apparent than with the moribund stockmarket conditions we have seen in recent times and the continuing uncertainties that are still out there.One other market that […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm