Mortgage Promotions is urging all mortgage brokers to put future FSA costs in perspective and is encouraging them not to be persuaded by scaremongerers into becoming an appointed representative.
It appears that an early online FSA application by an average-sized firm will cost £500. Annual mortgage PI costs are around the same figure and the annual FSA fee will be about £750. Adding another possible £500 for the Financial Ombudsman Scheme will take potential FSA-related costs to around £2,250.
Nick Baxter, Mortgage Promotions director, says: “The costs of FSA regulation are becoming clear and there is no reason why the cost of direct authorisation should constrain anyone into become an appointed representative. Sure, the costs of the FSA will be more than those of the MCCB, but they do not make direct authorisation impossible even for sole traders.
“It is interesting to look at Tax Freedom Day where the average UK resident has earned every penny needed to support government expenditure – it will be on June 7 next year. Working on the same basis, an average mortgage broker doing only one mortgage a day and earning an average procuration fee of, say, £500 per case will have paid the FSA-related costs by the fifth working day of the year.
“FSA costs are not a reason to be frightened into becoming an appointed representative.”