The Mortgage Market Review is going to change our industry and whether we agree with it or not, the most important task will be to ensure the cost of remaining compliant is worth paying, particularly as business acquisition remains challenging.
The debate over directly authorised and appointed representative status has been played out many times in the past.
But the impending effect of the MMR will increasingly weigh in favour of firms joining a network.
To remain a DA firm will take more resources not only financially, but also in terms of the increasing burden of proactive compliance.
One of the myths about becoming an AR is that it means a removal of independence. The presumption being that having someone else responsible for compliance means the AR firm is no longer master of its own destiny.
Certainly, every network and principal has its own interpretation of what represents best compliance practice. But the overall effect is no different to a DA firm taking advice from an outside compliance professional or its own internal compliance function.
Adviser firms must decide whether to try to swallow the extra compliance burden in terms of time and cost or risk not doing so when the regulator is becoming more proactive.
Alternatively, they can run an independent business under the umbrella of a well-founded and financed network and focus on helping clients rather than managing the expectations of the regulator.