Delivering on Promises
Chris Cummings - Director General - 10th December 2008 - 11:32
I have spent the last few days out talking to mortgage firms of all shapes and sizes and there is a commonality of view amongst all businesses: next year will be tough. AMI is determined to help members through a difficult year - and help members to help themselves.
The first of our initiatives started this year when we ran a series of business diversification workshops to assist members, compliantly, consider new business opportunities. In the New Year we will be offering "sales skills" courses to help members make better use of the opportunities that face them - and how to go and find them! After all, it was Abraham Lincoln (much quoted by the US President Elect) who once said: "Everything comes to he who waits - but only those things left by those who hustle".
We are also in discussions with FSA about the level of regulatory fees for next year. Given that the fee levels are "backward looking" it would do firms serious damage to have fee levels set from a period when the market was significantly better! We need lower, not higher fees, and the delivery of much discussed "regulatory dividends" for good, well managed firms! This is a view shared by the FSA Chairman, Adair Turner, whose thoughts were widely published in the Financial Times, it is his thinking that small firms have paid too much for too long, and it is time for the balance to be restored. We are working with FSA to ensure the viewpoint of their chairman is reflected in next year's FSA fees.
We also need the Ombudsman to play their part and offer more "free cases" as, sadly, we expect complaint numbers to increase. This has little to do with the advice given and everything to do with the economic situation. As borrowers struggle to pay their mortgages, they will look for someone to blame and my worry is that they will seek to blame their advisers - even if they didn't take their adviser's recommendations about budgeting and the necessary lifestyle changes to help pay the mortgage. How tragic if these borrowers were left exposed because they had opted out of buying MPPI due to its bad press - and then lost their jobs. I fear those who manufacture the product had an opportunity to deliver a better product - and if they had, the situation would be entirely different. So we need to see the numbers of free cases climb to 10 per firm (even at AR level) with the potential to "bulk buy" more cases in advance for larger firms who will need them given market conditions.
Finally, we need sensible public policy decisions by our politicians. The freezing of corporation tax (lobbied for by AMI) was a positive move, as was the extra business support announced at the PBR. I was surprised to see proposals to increase HIP requirements though - these look ill-timed and we will call on the government to think again.
Above all, we need sensible lending policies from lenders. The mortgage market will not be as big in 2009 and it was in 2008. We all recognise this fact. Consumers will still want mortgages advice. This fact too must be recognised. It is time for a new openness in the mortgage market to bring clarity which will benefit all current and future borrowers. AMI is determined to make sure we open up this new dialogue as without it lenders, intermediaries, and most importantly, consumers, will all be the poorer.