The chairman of the Association of Mortgage Intermediaries and the Association of Independent Financial Advisers took up the position two weeks ago, prompting some to accuse him of compromising AMI’s impartiality.
Both AMI and AIFA insist Sovereign Reversions is a property investment firm so there is no conflict of interest with Gummer, who is also Conservative MP for Suffolk Coastal, continuing in his role as chairman on both boards.
But Sovereign Reversions describes itself as a “finance company specialising in home reversions”, an area that will eventually be under the FSA’s remit and open to IFAs and those who specialise in equity release. In fact the firm admits it was Gummer’s involvement with AMI and AIFA that led to his appointment in the first place.
Graeme Marshall, chief executive of Sovereign Reversions, says: “We see the home reversion market as entering a new phase of development following the government’s decision to regulate it. Gummer’s experience of property-related issues, financial intermediaries and the workings of government will be of great benefit to the company.”
Some in the industry believe Gummer’s decision to take the appointment has created a conflict of interest.
One source close to AMI tells Mortgage Strategy: “I think he should resign from the non-executive post. He probably didn’t understand the ramifications of what he was doing but for the market’s sake and for AMI’s sake, it’s time for him to reflect on his position.”
Chris Cummings, director of AMI, says: “In his role as non-executive director, Gummer will have nothing to do with any mortgage product and, while he does not anticipate any conflict of interest arising, he would of course stand aside if any should arise.”