If you are still undecided on the direct authorisation versus appointed representative choice I expect you are trawling through the various networks' propositions to see if AR is the route for you. But don't be fooled into thinking that the remaining 150 days or so before statutory regulation is only the phase in which to decide which principal to choose – the door to direct authorisation is not yet closed. Granted, the FSA has said it will only guarantee to complete the direct authorisation process within six months and April 30 was the deadline for that. But it still aims to complete direct applications within eight to 12 weeks so if you are adamant you want to be directly authorised my advice is to proceed as soon as possible.
The Association for Direct Mortgage Authorisation (ADMA) is still available as a shoulder to lean on through the application process and of course there are a plethora of compliance services available to help with ongoing concerns post-Mortgage Day. It's also worth looking at the nursery options as these provide an interesting interim measure. If, however, AR is the route for you, I recommend The Association of Mortgage Intermediaries' 21 questions to ask a network as a must-read.
The FSA stated that by March 31 a total of 2,811 variations in permission had been requested and as a result of these 1,320 VOP letters have been issued with the FSA determined to produce the remaining VOPs on a regular basis. This means existing FSA-regulated firms looking to offer a principal proposition should be able to market themselves safe in the knowledge they will have authorisation to trade post-Mortgage Day. See AMI's website for a list of those successful (www.a-m-i.org.uk), although it could be some months before a full list is available due to the complexities involved in approving the larger organisations.
The FSA also said that by the end of April it had received 3,684 direct authorisation applications, of which 806 have received their minded to authorise letters. This still leaves around 10,000 firms (based on an MCCB membership of some 14,000) undecided as to which route to take.
Whichever route you choose, delaying your decision much longer could be to your detriment. There are now no guarantees of direct authorisation by October 31. Likewise your principal's joining process could take months to complete so again, October 31 could prove to be nothing more than the day the clocks go forward and winter is officially upon us.
Undoubtedly some individuals and firms will find themselves in limbo by leaving the decision to the last minute. However, what will be really intriguing will be to see how many brokers will throw in the towel altogether and stop trading and how many of the 10,000 will see their futures in the unregulated arenas of advising on buy-to-let and/or commercial mortgages.
And – although likely to appeal to only those who see mortgages as a secondary business function – yet another alternative is to become an introducer once mortgage regulation comes into force. And just to confuse confusion there will be two types of introducers: 'introducer', and 'introducer appointed representative'.
As an introducer you can pass mortgage leads through only to authorised advisers (who can be either directly authorised or appointed representatives). The onus on you as an introducer however, is to disclose details of any payment arising from the introduction and also to disclose whether or not you have introduced the lead to a member of your firm or group.
Becoming an introducer appointed representative is done by means of a contract between yourself and your principal whereby you effect introductions to an authorised person and/or non-real-time financial promotions (letters, emails, advertisements in newspapers, TV, journals etc).
It is possible to have a number of principals to whom you can introduce but in practice this will probably not be the case. As an introducerappointed representative you will be working within the regulatory framework and as such you must meet the same conditions you would have to satisfy to become an appointed representative.