The Association of Mortgage Intermediaries has calculated that financial regulations are currently costing brokers £20,000 a year each.
Robert Sinclair, director of AMI, recently gave evidence to the Treasury Select Committee on financial regulation.
Speaking at the Mortgage Business Expo, he told delegates the committee has asked the trade body to calculate how much regulations cost brokers.
Sinclair says: “The cost of compliance per mortgage broker is around £20,000.”
The figure includes professional indemnity insurance and costs relating to the Mortgage Market Review.
He says brokers will have to pay an additional £5,000 in regulatory fees and £9,000 in compliance costs.
Sinclair says : “In order to trade a mortgage broker will need at least a £20,000 profit. When we tell this to the committee the response will be shock.”
He says the FSA did not regulate the industry very well and brokers are now paying the price.
He adds: “The cost of regulation is far too great. It is not proportionate to the income of the industry.”