The £15m supplementary levy imposed on mortgage brokers by the FSCS will hit the best-qualified brokers hardest, says the National Association of Commercial Finance Brokers.
Rob Lankey, CEO of the NACFB, says:
“Of course we welcome any move that protects borrowers.
“The steps we’ve taken to embrace regulation have not been cost-free and our members are investing their own money into compliance, both through dedicated compliance schemes and in training and education. This laudable work means there is less spare money to spend on the FSCS levy, so this supplementary levy hits the best-qualified brokers hardest of all.”
One fifth of NACFB members – 170 firms – carry out residential mortgage business, but only a small proportion of those offer any investment advice and far fewer offer any kind of unregulated investment scheme of the sort that has led to the imposition of the levy.
Rob added: “We note that the FSCS does not expect this level of costs to continue into future years. Unfortunately measures of this sort do not send out the right message, whether or not each payment taken is large enough to do financial damage to the broker.
“Given that one unspecified firm is reportedly responsible for the majority of the claims that led to the £15m levy, it seems unreasonable to target the good guys to cover the costs incurred by their less reputable rivals. This is particularly unreasonable when the activities concerned related to unregulated overseas investments not to failings in the mortgage advice activities for which mortgage brokers pay their regulatory dues.
The NACFB would prefer to see a more equitable approach and one that recognises the work our brokers are already putting in every day to raise the standards of the industry as a whole.”