From Richard Griffiths
Ian McIver of Whitechurch Network contributes to the dialogue between his colleague Neal Smith and myself (Mortgage Strategy April 19), opening with the view that Neal is right and by implication I am wrong. No surprise there, and please form an orderly queue with the many people who think likewise.
Ian then launches into a tirade about accuracy and correctly points out the incongruous (I can do long words as well, four syllables and more) inclusion of Burns-Anderson in the list of supposed mortgage networks. This is the same list as that which appeared in the March 8 issue but is not the same one I sent through to Mortgage Strategy on March 2. MS decided to add Burns-Anderson to the list.
Lighthouseloan and Solution Network should also be removed from the list as they are directly regulated firms with employees, either salaried or self-employed. The Network Strategy supplement being published May 4 should present a more accurate picture of true networks, including Whitechurch.
I note Ian's comments on the demise of Interlink but they really are high level platitudes that could be found on page two of Noddy's Little Book of Corporate Governance – running a 'tight ship' and all that. As to the matter of PI insurance premiums I do recognise that this is a major issue and will impact on the new mortgage networks. But is Whitechurch immune? Ian seems to have skipped over any problems/concerns with escalating premiums for PII.
The real crux of Ian's letter is his view that mortgage clubs and packagers regard FSA compliance as a bolt-on.
Firstly, I would say that Ian is mimicking a number of currently authorised firms who think, or hope, that the new networks will struggle with FSA authorisation. Peter Brodnicki of the Mortgage Advice Bureau, a major tied agent of L&G, thinks the new networks will have a problem with the FSA; Stanley Lovell of IN Partnership reminds us that IFA networks are already authorised, while Friends Provident ads carry the inane message: 'Would you fly with an airline whose pilots have no experience of flying?', referring to networks with no experience of FSA regulation.
Their arguments are generally disingenuous and of little substance, perhaps reflecting the paucity (look that one up!) of their offerings to prospective ARs. What they conveniently overlook is that none of them are regulated for mortgage business – they themselves have to apply to the FSA for a variation in permission. It may be a different form to fill in but nevertheless they are applying to the FSA for permission to carry out regulated mortgage activities the same as everyone else.
To return to Ian's point about compliance being a bolt-on, speaking on behalf of Network Data we have been running a network of brokers using our single MCCB registration number for over two years. We employ eight regional compliance officers and are well aware of the incoming changes from the Mortgage Code to the FSA regulations.
I am sure this also applies to our major competitors, with both Mortgage Intelligence and Pink Home Loans saying they have spent, or will be spending, over £1m on their compliance services. To suggest we regard it as a simple bolt-on is untrue and an unjustified slur. There are mortgage networks that do not even employ a compliance director and/or believe they can carry out their compliance monitoring remotely and hopefully the FSA will have the sense to nip these in the bud and not allow them to operate post-October 31.