Combine the reduced lending that the former is likely to cause with the increased cost of paying for the latter, and brokers are likely to find that their bottom line is more squeezed than ever.
It is likely that the MMR and the Retail Distribution Review are just the thin end of the wedge and that there is still the potential for more regulation in the future.
For small brokerages, especially those that are directly authorised, the financial and time constraints of staying compliant could adversely affect the business of writing mortgages.
To that end, brokers flying solo should consider sheltering from the regulatory storm under the protection that networks can offer.
While doing so isn’t entirely without cost, this outlay will be more than recouped through the value that is added to their business by being part of a collective of similar firms.
This strength in numbers manifests itself in various ways, from access to keener products and rates, to a more transparent fee structure and the potential to align with other, like-minded firms and create a brand based on quality.
Becoming an appointed representative of a network would enable brokers to keep their individual brand while becoming more insulated from future changes.