Brokers blame regulation for their business woes

industry research reveals brokers are still blaming regulation for reducing profits and making life harder.

Research from Marlborough Stirling and Trigold reveals that 84% of mortgage intermediaries say their business costs have increased since regulation. And the upshot is that around 75% are sharpening their focus on technology.

Phil Heaton-Jones, head of marketing for Marlborough Stirling, says: “While it is perhaps unsurprising that costs have increased since regulation, it’s encouraging to see the intermediary sector looking for ways to maintain its competitive edge.”

Alliance & Leicester research also shows times are hard, with its survey finding 58% of brokers seeing lower profits. Just 44% complained of decreased profits 100 days into regulation.

A&L says over half of all brokers are spending more time on maintaining business levels and that many brokers now say Key Facts Illustrations do not provide a benefit to customers.

Most brokers, 77%, feel the job has become more difficult since regulation. The research suggests appointed representatives find it most challenging, with 82% saying it is now more difficult compared with 72% of those who are directly authorised.

Mehrdad Yousefi, head of intermediary mortgages at A&L, says: “Nearly one year on, brokers still have frustrations and many are experiencing problems.”

But research from BM Solutions shows confidence in the market is still high. Its latest One Specialist survey asked over 200 brokers what they expected of levels of mortgage business in the next three months. Advisers expect all sectors of the market to increase between 3.1% and 3.7%, a sign that consumers are still in the market for mortgages.

When advisers were asked the same question for the June survey they felt business levels would grow at a much slower rate, between 0.2% and 1.7%.

Martin Reynolds, head of sales at BM Solutions, says: “It is the broker who can really gauge consumer needs and levels of demand. Therefore this feedback is extremely encouraging.”