Blackandwhite.co.uk says the Financial Services Authority needs to provide a lot more support for small firms and sole traders
This follows the FSA revealing that only one third of mortgage firms have robust processes in place to provide customers with suitable advice, with smaller firms yet again coming out the worst.
Thomas Reeh, chief executive officer of blackandwhite.co.uk, says: In the worst cases some of these firms and sole traders have faced costly enforcement action.
But is this really that surprising?
“Rather than wield the axe the FSA needs to provide a lot more support for small firms and sole traders because the level of complexity operating as a mortgage broker is simply beyond the resources that many possess.
No doubt the usual band of doomsayers will be on the bandwagon pointing a finger at those naughty mortgage brokers but without the sole traders and partnerships in existence the UK mortgage market would lose 40% of its distribution capability and that means less choice and accessibility to advice for consumers much less.
“Thats not good.”
The FSA reviewed 252 firms of differing sizes through mystery shopping, visits and questionnaires between June and October last year.
But Reeh questions how much the FSA shares with the broker community about what is good and bad practice.
He says: To date it has been guarded about naming names or even less about sharing best practice.
Whilst the need for privacy is understood there is nothing stopping the FSA from sharing best practice processes and systems with the identity of the broker preserved.
The cynics of course would argue that the FSA has not done this in case something it holds up as good comes back to bite it.
The FSA is still feeling its way on that front, and so too is the broker community.”