Until final rules are released later this year, it’s hard to determine the precise impact that the MMR will have on the broker market.
The critical issue is whether or not the FSA holds the line on the importance of advice and doesn’t buckle under pressure from the CML to water down the proposals.
Driving up standards, improving business quality and protecting clients are at the heart of the MMR, so I remain hopeful that the FSA won’t back down.
If so, the cost and risks of transacting via direct channels for lenders will increase markedly.
This must make brokers more attractive, particularly when the work being undertaken under the ‘Know your Distributor’ banner is helping to ensure the lenders are dealing with the best of the broker community.
However, the MMR impacts on so many different aspects of our market and you’ve only got to look at the speed of change in the interest-only, fast-track and self-cert sectors to see the potential for the MMR to reduce the size of the market potentially.
The final rules on mortgage prisoners, debt consolidation and loans into retirement amongst others will all impact on the role and potential for brokers, but at this point I am optimistic that the MMR will be good for broker business.
Courtesy of Mortgage Solutions (2 May 2012)