Broker Talkback (Money Marketing, August 22) asked 10 IFAs who specialise in investments and dabble in mortgages: “Should independent mortgage brokers face the same regulatory requirements as IFAs?” This got a 100 per cent “yes” response. My answer to your question is an emphatic “no”.
I am an independent mortgage broker representing the client, not the lender. I now specialise in mortgages and refer clients who need specialist investment or protection advice back to their own IFAs.
Four years ago, a survey was conducted by Suffolk trading standards on brokers' response to the then new mortgage code. The survey took place before brokers had even received information on the code from the lender-controlled MCCB.
I sought out statistics from MPs and trading standards as to the number of mortgage complaints received that would prompt such a survey and was told that none were available because the actual number was insignificant.
So why all this fuss? Ten years ago, we had 500 providers. Then the EU told the UK Government that there were too many financial institutions to trade globally.
Lenders sold conditional endowment mortgages and reaped the benefit of the commission and rip-off mortgage guarantee premium receipts. Lenders then went on to undermine endowments and other investment products and IFAs frightened borrowers into making the monthly capital payment direct to the lenders.
The surplus cash allowed lenders to buy out or merge the undervalued insurance/ investment providers/smaller lenders. We are now down to around 120 providers with thousands of job losses already and more on the horizon.
Providers want 100 per cent direct business as soon as it is prudent to do so. Within 10 years, we will be down to fewer than a dozen providers.
All the intermediaries who represent the clients will have been squeezed out of business by the regulator/lenders association. The only intermediaries left will represent the providers.
Fortunately, my zimmer frame is not far away.