FSA takes brokers back to the future

12 July 2010

It’s not my usual thing to read on a Sunday evening but after England’s woeful performance against Germany I recently found myself reading the Financial Services Authority’s Policy Statement 10/9.

This is the feedback and final Mortgage Market Review policy paper covering arrears and approved persons.

I was left thinking we have come full circle in terms of how brokers are expected to operate, especially when you consider requirements being introduced for individuals advising on or arranging home finance.

When statutory regulation started the FSA chose not to introduce a regime which required a fit and proper test and the individual registration of advisers, yet almost six years on from Mortgage Day we seem to be back where we started.

From now on, all individuals providing mortgage advice will be personally accountable. This U-turn will cost up to £13.8m, with annual costs of close to £2m.

Like most brokers I support the approved persons regime but can’t help but think that it would have been less disruptive to have followed the Mortgage Code Compliance Board model in the first place.

Reducing fraud, tracking individuals and applying sanctions is important, and advisers must take responsibility for their actions. But at the moment many can ill-afford additional costs.

Again, the FSA is late to its own party and I hope those charged with overseeing this change learn from the errors of the past.

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