I see this as another kick in the teeth for brokers who use packagers the way they should – as a service that adds value to their business.
Good brokers ask the right questions and get the correct information about their customers to allow them to find suitable products.
In turn, packagers dedicated to adding value ensure all this information is taken into consideration to allow them to search their lender panels to find the most suitable lenders and deals for brokers.
As I have said on many occasions, provided packagers use multi-lender cascading and all the other information provided, they will be able to find the most suitable lenders and deals.
The resulting information can then be given to brokers to help them make choices for their customers. Many brokers I have spoken to know they are solely responsible for the choices made for customers, and are only too aware that the buck stops with them.
We place a disclaim-er at the foot of the decision in principle response to advise our brokers that the decision is their responsibility – but they know that anyway, don’t they?
Brokers are responsible for their own compliance and therefore they should be aware that they are responsible for the products that are chosen.
So why do they use packagers? The answer is simple. Brokers use packagers to help them through the maze of criteria and products on the market. Especially in the area of sub-prime, products and criteria are seldom black and white.
A good packager knows all the niches, knows how to package cases positively and most importantly knows lenders and their nuances. Show me a sourcing system that has these grey areas covered and can help you package cases so perfectly they go to offer on day one 90% of the time.
The regulator is right to look into the relationship between brokers and packagers, and it is certainly correct with regard to the compliance issues surrounding this subject. But isn’t it just telling us what we already know?