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Take the lead

Why is that the FSA pays so much heed to the Consumers&#39 Association and proposes some bizarre and unnecessary regulations?

The latest folly to come out of Canary Wharf is the news reported by Money Marketing (October 10) that the FSA is proposing to ban mortgage brokers from cold-calling.

The reason for this? Because life insurance salesmen cannot cold-call. So there you have it. Not because there is a history of misselling, not because the FSA has been inundated with complaints from innocent consumers who simply cannot get through an episode of Coronation Street without being harangued by unwanted phone calls and not because of any exploitation.

No, it is just neater if they ban life and mortgage salesmen from cold calling.

Not for the first time, we have some quango employee making an arbitrary ruling that affects the livelihood of thousands of honest, decent, hard-working individuals (incidentally, that is the mortgage brokers).

I have to put my hand up and come clean myself. As a director of the Professional Advisor Alliance – the UK&#39s biggest retailer of qualified mortgage leads – I have to admit that the decision to ban cold-calling is about as good a gift as I could get.

But this helping hand is not necessary. Mortgage leads is the exciting new frontier of the mortgage industry.

I acknowledge that mortgage leads are not new but the internet and interactive TV are changing the dynamics of mortgage lead generation.

The PAA, through its tie-up with money supermarket.com (the sister company of Mortgage 2000) has created an infrastructure where a consumer requests they be contacted by a mortgage professional and the customer details are emailed within an hour to an inter-mediary in the same locality.

The PAA already has a “blue-chip” list of partners exclusively supporting leads – Yahoo, The Mail on Sunday, Lycos, Sky TV, Guardian Unlimited, Ask Jeeves, Telewest, BTopen-world, with more to follow.

For mortgage leads, speed of delivery is critical as the deterioration rate is rapid. Mortgage intermediaries will pay for mortgage leads but only if the conversion rate is good, so swift delivery is a major component in establishing a sustainable relationship between lead generator and recipient.

The internet and TV, combined with email, allows fast dispatch. The evidence for this is supported by PAA research showing an incredible 52 per cent sales conversion rate, with 31 per cent of leads producing an immediate sale and a further 21 per cent producing a sale within two to three months.

Internet-sourced mortgage leads are set to become a mainstay from more mortgage professionals.

My recommendation is that mortgage intermediaries lobby the FSA to drop the proposal to ban cold-calling, although I would not presume that common sense will prevail. Irrespective of this, I believe the internet harbours immense opportunities to source incremental business and this should be fully explored by mortgage brokers wanting a sustainable source of mortgage business.

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