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‘Regulator is causing club conflict’

Premier Mortgage Service chief executive John Malone believes the FSA does not understand distribution in the mortgage market and is causing problems between packagers and intermediaries

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He says intervention from the FSA has disrupted the once happy relationship between intermediaries, packagers and lenders.

In a letter to Money Marketing this week, Malone and Mortgage Promotions dir-ector Nick Baxter apologise to brokers on behalf of the FSA for the unnecessary burden imposed on intermediaries of having to mention mortgage clubs in key facts illustrations.

Malone does not believe that the name of the mortgage club needs to appear on the key facts illustration in the procuration section.

Concerns have arisen from IFAs that the inclusion of details of mortgage clubs and packagers on KFIs confuses clients.

IFAs have found themselves having to explain to clients that they are independent where a mortgage club or packager’s details are contained on its documentation.

Malone believes that at no time should the company name appear on a consumer document, regardless of whether or not the packager has arranged an income with the lender.

He says: “The last thing we wanted was for our name to appear on the KFI. Now the income is seen as procuration fee or part of a marketing fee. The FSA just does not understand distribution.”

Norwest Consultants principal Harry Katz says: “I don’t think it is for the packager to apologise. Shouldn’t it be the FSA apologising?”Letters, p37

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