View more on these topics

Packager views on CP146 revealed by SPML survey

Southern Pacific Mortgage Limited (SPML) recently polled its packager base on the regulatory issues raised by CP146.

Results were analysed in two groups: packagers dealing both with advisers and public, and those who only deal with advisers (a roughly 50/50 split).

Regarding the pending December 31 deadline for adviser qualifications, the survey found that, although only a quarter of respondents believed that 75 -100% of advisers had already passed the first paper of their chosen exam option, well over half (54%) believe that 75-100% of advisers will be fully qualified by the 31 December deadline. Among packagers that do not give advice themselves, it was felt by 45% that their adviser base would diminish after January 1 2003. This degree of reduction could potentially affect consumer choice, so it may need to be monitored in future.

The survey also showed that packagers had concerns about the timetable for the implementation of regulation. However, here, results from the two groups showed quite a wide variation. Packagers who also give advice were much more confident about meeting timetables than their non-advising counterparts. The first group showed 42% feeling confident that they would meet the individual authorisation deadlines, and more than a third confident that 6-9 months would be enough time to prepare for full regulation, once the final rules for the selling process have been published. Of the non advice-giving packagers, only 14% were confident that individual advisers who they deal with would meet the authorisation deadline, and only 16% believed enough time was being allowed to prepare for implementation. However, the fact that neither group had a majority believing that timescales were adequate supports our own view that more preparation time may be necessary.

On the subject of sourcing Pre-Application Illustrations (PAIs), across both groups two thirds of the market said that producing their own PAIs was the least favoured option. The two most popular options for sourcing PAIs were online databases/ search engines, and lenders&#39 own computer operating systems. This indicates that the cost of regulation for smaller firms may be too onerous and, and they may consider leaving the market rather than commit to substantially increased overhead costs.

Regarding the FSA&#39s proposed three categories of “advice” (fully advised sales; non-advised sales with filtering questions; and non-advised, execution-only sales) more than two thirds of all respondents believed that they and their feeder advisers fitted into the &#39fully advised sales&#39 category. Between two thirds and three quarters also felt that these three categories adequately cover the whole market. However, the fact that the remainder feel that there is room for further definition would indicate that this area may need further consideration by the FSA.

On the subject of the FSA&#39s proposed “high-risk” mortgage categories: bridging loans; flexible loans with drawdown; and equity release (now termed &#39lifetime mortgages&#39), both respondent groups agreed with all three high risk categorisations, but to varying degrees. Levels of agreement on the “high risk” definitions were lowest concerning flexible/ drawdown mortgages (54-64% agreement), and highest regarding equity release (70-75% agreement) – perhaps reflecting the greater overall familiarity of flexible products in the market, as opposed to equity release ones.

Stuart Aitken, SPML&#39s director of credit, says: “In the past, the official response from brokers and packagers to regulatory consultation has been extremely low. All of our applications are packager introduced, so we needed to take their views into account when responding to CP146. We have surveyed packagers for their views when making our previous responses to regulatory consultation, and this has become even more important as the final rules are now being shaped. It is crucial that the voice of the packager and broker is heard and I would urge them all to ensure they make their feelings known to the FSA. Our survey has given us some very useful information that we have fed into our own CP146 response.”


Charcol report reveals the rise and rise of &#39the singleton&#39

Britain&#39s home owners are becoming increasingly young, free and single, according to a new report issued by Charcol. The number of single homeowners has risen by 13% over the last 15 years and evidence suggests they have contributed more than their joint mortgage counterparts to the huge rise in property prices over this period. Barring […]

Roy Nicolson takes over as chairman at IFAP

IFA Promotion, the organisation promoting the benefits of independent financial advice, has announced that its chairman, Kevin McBrien, will be stepping down at the November IFAP board meeting due to other pressures on his time. Roy Nicolson, chairman of Advice First, will take over on an interim basis and will co-ordinate the appointment of a […]

NatWest launches NatWest One microsite

NatWest has launched a new &#39microsite&#39,, which promotes NatWest One, its current account mortgage. Created by Zentropy partners in conjunction with NatWest, the site gives users access to calculators, which illustrate the savings that might be made by switching your mortgage to NatWest One, product details and information on how to apply for the […]

NAMBA/AIFA plan first public outing at Expo

The new association between NAMBA and AIFA will appear in public for the first time at next week&#39s Mortgage Business Expo at London&#39s Olympia, writes Helen McCormick. Members of the National Association of Mortgage Brokers and Advisers steering committee and staff of the Association of Independent Advisers will share a stand at the event. NAMBA […]


Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.


News and expert analysis straight to your inbox

Sign up