Brokers have hit out at the Financial Services Authority for failing to do its job properly after it told lenders to improve supervision of their broker panels.
In its Mortgage Fraud Thematic Review, unveiled last week at its Financial Crime Conference, the FSA says a number of lenders are failing to employ due diligence in the supervision of their panels.
The regulator says lenders must be more proactive in managing broker panels and keep firms under continual review.
It claims some lenders are relying solely on the FSA register to vet brokers but says this is inadequate because the register does not contain enough information.
However, brokers claim it is the FSA’s job to regulate intermediaries so being on the register should be proof enough that a firm is reliable.
Mike Fitzgerald, sales and marketing director at Emba Group, agrees that brokers should be fit and proper individuals, but says checks ought to be done before they are authorised to give advice.
He says: “It is down to the FSA to make adequate checks on brokers in the first place, rather than deferring responsibility to lenders years later.”
And one broker commenting on Mortgage Strategy Online says: “If lenders cannot rely on the FSA’s accreditation then we are wasting our regulatory fees.”
Others feel the FSA’s comments contradict its decision to delay the introduction of individual registration for mortgage sellers until at least 2013.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says individual registration would help firms to identify rogue individuals in the industry so the FSA’s delay is disappointing.
He adds: “Lenders should be diligent when reviewing their broker panels but any action taken should be appropriate and proportionate.”