View more on these topics

Regulatory Alliance of Mortgage Packagers: Use compliance to gain an edge

As the move to principles-based regulation takes hold it is becoming evident that the packagers that will continue to thrive are those providing regulatory support to help their lending and intermediary partners ensure the mortgage sales process is compliant

The value of any alliance, club or organisation that brings together individual members is to exploit the value of the group dynamic in such a way that it provides advantages and opportunities for all involved. In the distribution market, the number of groups and distributors which have other packagers feeding business into them has grown hugely over the last few years. Without exception, the major advantage for all of them has been one where there has been a major opportunity to use their joint muscle to provide better products, service and fees for introducers for introducing the business.

The days when individual packagers, particularly the smaller ones, could compete with larger players are long gone. Even providing a local personal service that has been the main advantage of smaller packagers for some time will not be enough to help them survive in the regulated environment where intermediaries have no choice but to go where the best deals are. Increasingly, smaller packagers acting on their own are not going to be able to source these deals. They need to be a part of a larger whole.

When regulation was introduced there were many who believed that as pure packagers were outside the regulatory envelope, they would be the least interested in compliance and the effect it would have on the rest of the market.

In many respects, this has proved to be correct. With the exception of a small number, the majority of distributors and packaging associations have had little or nothing to do with understanding the ramifications and effect compliance would have on the rest of the industry.

But in two short years the importance of regulation and compliance has permeated every facet of the business and distributors that have ignored its position as one of the major drivers of the market have underestimated the importance regulation had from the start and, more importantly, the continuing influence it is having as we go forward. Compliance is an evolutionary factor in the industry and not a one-off event as many believed it to be.

When the Regulatory Alliance of Mortgage Packagers was formed, it was able to command greater attention from its serv” Networks have seen the advantages of dealing with distributors that have taken the principles of compliance seriously “ice providers but that was not the main reason to bring its members together. Rather, as the name suggests, RAMP was set up to offer its members a focus on the most important factor to have an impact on the industry, namely, regulation and its effect not only on packagers but also on the wider market.

RAMP is unique in that it has two full-time compliance experts who help to co-ordinate the activities of all its members’ compliance departments and the way that, as a group, RAMP members are able to offer a compliant methodology to their introducers, its products and service providers.

The future for the dominant position of packagers at the centre of mortgage distribution will have to reflect more and more the need to be an important part of the quality circle which has treating customers fairly at its heart. The whole question of regulatory support and the assistance given by packagers to their lending and intermediary partners to help them achieve their regulatory obligations will have a huge bearing on which packagers continue to thrive.

As regulated entities, lenders have a number of responsibilities that were not there before regulation and primary among those is to ensure that when they are dealing through third parties, such as packagers, the client is receiving the best possible service and RAMP members, thanks to the work done over the past two years, has proved that this is the case.

As far as intermediaries are concerned, the value of a compliance-centred packager alliance is becoming more apparent. Whether it is to ensure that products are being correctly presented and accurate information is available, to the quality of the online tracking and the subsequent availability of data to provide a robust audit trail of activity.

Networks have seen the advantages of dealing with distributors that have taken the principles of compliance seriously and are able to work with them to ensure that the mortgage sales process is compliant.

This year the move to principles-based regulation will really take hold and more than ever, lenders and intermediaries are going to need the reassurance that dealing with packagers with a real understanding of the ramifications can bring.

By John Rice, managing director, Regulatory Alliance of Mortgage Packagers


Britannia reports 22% increase in mortgage lending

Britannia has reported a 22% increase in mortgage lending to 8.4bn in 2006. The societies annual results show group net lending was 2.3bn while profits were up to a record 130.4bn last year. Neville Richardson, group chief executive at Britannia, says: “Britannia’s record results reflect a growing business that is delivering for its members. Sales […]

Brokers can help their clients go green

Going green is trendy. In just over three months, the government will introduce Energy Performance Certificates as part of Home Information Packs. EPCs will provide buyers and sellers with A to G ratings on their homes as well as a list of measures to cut fuel bills and carbon emissions.

Brokers must sell MPPI with care

The referral of the payment protection market to the Competition Commission means that any complacency brokers might feel about selling MPPI would be misplaced, says Bill Warren


Guide: how to change your auto-enrolment support

As we approach the two-year milestone of auto-enrolment, employers have had the opportunity to truly assess the capabilities of their chosen support. They are also now realising that getting to the staging date was the easy part, and that support is required for almost every aspect of the day to day running of their scheme. With the three-year re-enrolment window coinciding for many with the total removal of commission and Active Member Discounts from pension-related products and services, as well as the introduction of the pension charge cap in April 2015, many employers will have no choice but to review their support options. But, what is involved in transitioning your auto-enrolment scheme away from your current support options? This guide from Johnson Fleming aims to outline some of these key areas and provide information and discussion points on what you need to consider.


News and expert analysis straight to your inbox

Sign up