Bob Hunt is Chief Executive of Paradigm Mortgage Services
Since assuming regulatory control of the mortgage market the Financial Conduct Authority hasn’t been backward in coming forward in announcing its intentions and I for one welcome this firm stance.
There have been a minority of dissenting voices who consider the watchdog’s opening statements as heavy handed but a steady hand on the tiller is just what the market needs right now - for all the hankering after the good old days, certain practices and behaviours can never be allowed to return.
A recent FCA conference on financial crime found the regulator in typically defiant mood and raised a couple of points that provided some real food for thought.
The first of these was chief executive Martin Wheatley’s assertion that the FCA will demand increased morality as well as regulatory compliance from financial services workers.
He told delegates the FCA is now far more willing to make ethical, judgement-based decisions and to examine questions of moral hazard as much as cases of what he termed “mechanical impropriety”.
Although it may prove difficult to gauge the morals and ethics of advisers in specific situations, I agree wholeheartedly with the essence of what Wheatley is saying – that being fit and proper isn’t solely about abiding by the rulebook and ticking off a checklist, but about accountability and proper personal conduct underpinning everything advisers do.
Adopting this attitude, along with adhering with the principles of the Mortgage Market Review to be introduced, should see standards and professionalism increase across the industry.
It was also interesting to hear the regulator stress the importance of “keeping the financial services industry clean by keeping those without integrity out of the sector”.
The reason this struck a chord with me is because at a recent MMR forum we held one of the topics covered was where the mortgage market would source new blood when lending activity increased again.
Seeking young talent and bank staff becoming brokers were mentioned, but one suggestion that reared its head was that some individuals who had been previously ejected from the market would look to return once things are on the up again.
I think compulsory mortgage regulation and subsequent legislation has done a great job of purging the market of its more roguish elements and the MMR will be an extension of that drive towards quality.
It is up to all of us to ensure this flight to professionalism continues and that the more unsavoury characters are not allowed to sneak back in.
The FCA also touched on the topic of fraud at its conference and stressed its commitment to tackling financial crime and making increasing use of its enforcement powers.
As with weeding out insalubrious individuals, I think the mortgage market can be proud of the steps it has taken to combat fraud but there can be no resting on laurels as it is a constant battle to keep up with increasingly sophisticated methods of deception.
The fact that the regulator handed out more than £300m in fines last year against the previous record of £89m shows just how serious it is about eradicating malpractice from our industry.
And while there will always be those who bemoan further regulation and strict rules, if it improves standards for the rest of us there can be no grounds for complaint.
