Good brokers could end up paying for cowboys

Good brokers could be paying for the few mavericks in the industry if individual regulation comes through, says Julie Alderson, director of Management Services 2000.

In an exclusive interview today Alderson supported moves toward individual regulation that have been suggested by the Financial Services Authority and the Association of Chiefs of Police but warned that some brokers may not find it appealing.

Alderson says: “In the long term individual registration is a good idea as it will create a level playing field.

“But the registration of 100,000 to 200,000 additional brokers is going to be costly and there’s an argument that says that the good guys will ultimately end up paying for the bad ones because the FSA is going to have to charge additional fees to cover the cost.”

Alderson highlights the dangers of shoddy brokers bouncing from firm to firm unnoticed but says that those operating at the benchmark level and above could end up being inadvertently penalised because it can’t trust individuals to operate compliantly.

She says if the FSA chooses to pursue individual regulation it will have to do a serious cost-benefit analysis to determine its worth and how it should roll out.

Keep an eye out for the full interview with Alderson on broker compliance in an upcoming print edition of Mortgage Strategy.