View more on these topics

Call for FSA to focus more on smaller firms

Industry figures have called on the Financial Services Authority to commit more resources to smaller firms and networks after a probe by the regulator raised concerns about a mis-selling scandal.

The probe, undertaken between June and October last year, found that more than 75% of small mortgage networks and advisers did not have robust processes in place, leading to the risk of products being mis-sold.

Banks, building societies and larger mortgage networks among the 252 firms surveyed fared better, with the FSA citing the majority as having robust processes in place.

Particularly poorly performing firms that fail to improve their pro-cesses will face stiff penalties such as fines, public censure and the removal of their permission to conduct regulated business.

The FSA, which says it will work with these firms to improve their processes, has been called on to commit more resources.

The Association of Mortgage Intermediaries has published a factsheet in response to the probe.

Rob Griffiths, associate director at AMI, says: “Many larger intermediary firms feel FSA resources are not evenly spread between small and large companies. They are concerned that many small firms are below the FSA’s eye level and therefore beyond the reach of regulatory scrutiny on an daily basis.”

Lee Birkett, chief executive of Prestbury, says: “With the FSA’s report stating that two-thirds of small firms not up to the job, what is it going to do about it?”

Prestbury’s solution is for smaller firms to sign up for FSA-standard compliance packages from networks.

Ray Boulger, senior technical director at John Charcol, agrees.

He says: “The FSA needs to push resources away from big firms and towards smaller ones. If quite a few small firms are doing things wrong, the impact on consumers is significant.”

But the regulator says it is already focussing its energies on smaller firms.

A spokeswoman for the FSA says: “We put on roadshows and surgeries targeting small companies. We have focussed on our communications with small firms over the past 18 months.”

Recommended

Overseas buyers take 90% of Oakwood

Merrill Lynch and Italian investment firm Compagnie Industriali Riunite have finalised their 90% acquisition of Oakwood Financial.

Commercial First reports 200% growth rate

Commercial First has reported a growth rate of over 200% in further advance lending since it set up a team to service this business six months ago. Stephen Johnson, sales and marketing direct Commercial First, says: The further advance team are able to use many aspects of the original application including documentation, the conveyancing process […]

Hamptons welcomes financial capability scheme

Hamptons Mortgages has welcomed the governments financial capability strategy despite the recent shake-up of legal aid. Jonathan Cornell, technical director at Hamptons Mortgages, says: It is good to see the government promoting a scheme to provide generic financial advice to the public. This will clearly benefit the less financially astute members of the community and […]

Housing equity is three times mortgage debt

Halifax says housing equity significantly outweighs mortgage debt, with UK private housing stock now worth £3.8trillion. This means housing equity is more than three times the value of the outstanding mortgage debt of £1.1trillion. The value of housing stock has increased by 78% in the past five years, rising by 12%, or more than £400bn, […]

Tackling the housing crisis will take more than money

The latest housebuilding figures from the Department for Communities & Local Government confirm the worst fears of many within the property industry. We are failing to address the housing shortage in any meaningful way. Let’s look at the number of housing ‘starts’, new housing projects where work has begun. In England, work has been started […]