The FCA gives the sector’s arrangements a clean bill of health.
Putting market myths to bed can be a satisfactory process and the recent FCA interim mortgage competition report, while being a long way from perfect in terms of analysis and suggested measures, does do this in some key areas.
Importantly, it found current commercial arrangements between firms do not lead to poor consumer outcomes. This is very positive for mortgage intermediaries and lenders, but also networks and mortgage clubs more specifically.
‘No negative impact’
There has long been an accusation levelled at the principal/distributor world that our arrangements with lenders encourage advisers to choose certain products that pay more and are therefore not always the right recommendation for the client.
So, it is nice to hear the regulator say this is not the case. Indeed, according to the report, panel use by all types of firms “does not have a negative impact” on consumers at all, with no evidence found of it leading to more costly mortgages.
Now, the industry might well want to turn around and say: ‘We told you so!” but, given the FCA found the need to carry out this research in the first place, it would be rather churlish to do so.
Instead, we should focus our energy on delivering quality services to member firms and ensuring they meet all their responsibilities.
Enhancing the offering
The network’s role in delivering on this cannot be underestimated, specifically in a market like the mortgage and protection one, where a large number of small firms need to be authorised, regulated and policed.
Networks provide one point of contact for the FCA in that regard, so having such a large number under one umbrella suits it well.
We should feel confident in our ability to work with members, deliver products and services, and provide the umbrella so many parties need in this market.
Our arrangements with lenders and providers enhance the adviser-client offering, so we should certainly view this latest news as a major positive for all.
Richard Adams is managing director of Stonebridge Group