The Intermediary – August 2025 - Flipbook - Page 74
B RO K E R B U S I N E S S
Opinion
Independence
doesn’t have to
mean isolation
T
he appeal of being
directly authorised
(DA) is rooted in the
freedom to structure
your business your
way, choose your
lender panel and build a brand that
reflects your values. With regulatory
expectations rising, though, many
DA brokers are considering whether
independence needs a rethink.
In July, the Financial Conduct
Authority (FCA) published its
Policy Statement on the Mortgage
Rule Review, making it clear that
the context for compliance has
fundamentally shied. It said:
“Recently, the introduction of the
Consumer Duty has set higher
standards for consumer protection
across retail financial services [...]
We now want to give lenders and
borrowers more flexibility, whilst
still ensuring firms act to deliver good
consumer outcomes.”
This policy statement, the first in
an expected series, changes some rules
with immediate effect. For brokers,
among the big ones are:
Interactions between a firm and
customers will not immediately
trigger advice. This will allow easier
interactions between firms and their
customers, while helping to ensure
advice is provided when needed.
Firms will be required to consider
what procedures are appropriate to
identify execution-only customers
for whom advice or other support
may be necessary to avoid causing
foreseeable harm.
Removing the requirement for a
full affordability assessment when
reducing the term of a mortgage.
The implications for advisers are not
straightforward. Over the past two
years, lenders have upped the ante
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The Intermediary | August 2025
on customer retention strategies,
investing in slick platforms that
support quick product transfers
while enticing existing clients with
preferential rates. Some lenders have
made every effort to incorporate
intermediaries into this; others have
not made independent advice an
explicit part of the customer journey.
Removing the trigger for advice is
likely to result in an even greater focus
on lenders’ direct customer retention,
with the knock-on effect of making
client acquisition and retention for
advisers more competitive, and likely
more expensive.
For this reason, enshrining the
requirement to “consider what
procedures are appropriate to identify
execution-only customers for whom
advice, or other customer support,
may be necessary” is another change
that advisers should give careful
consideration to. While lenders
are ultimately responsible in the
execution-only channel, the hand-off
of customers identified as needing
a greater measure of support may
necessitate advisers taking on a
share of that duty. It makes sense to
do this via largescale commercial
partnerships – networks offer
consistency, trackable compliance
and the reassurance of another entity
taking regulatory responsibility.
Access to lender panels is key to any
adviser, and the direction of travel
could make it more challenging for
smaller DAs to maintain that access on
competitive terms. Quality convertible
leads are already hard to come by, and
those pressures will likely continue
to build.
Compliance and the technology
systems needed to evidence it are
increasingly sophisticated and
expensive. Bespoke platforms might
work well for an independent
ROB MCCOY
is senior product and business
manager at TMA
brokerage, but may present a technical
headache for lenders that becomes a
bridge too far.
Most DA advisers begin within
a network – structured oversight,
centralised compliance, access to
technology platforms, all within an
established and robust operational
framework. While this comes at the
cost of some autonomy and revenue
share, it offers the reassurance of
shared responsibility and simplified
regulatory compliance.
Ask those appointed representatives
(ARs) who have gone DA and they’re
unlikely to want to go back. Yet, in
the current environment the benefits
of being part of a larger commercial
outfit are increasingly clear. There
is a middle ground: a mortgage club
which can offer targeted compliance
support, tech partnerships, business
development tools and access to
training, all without compromising
on autonomy.
For many DA firms, this offers
the freedom to run their business on
their terms, while benefiting from
expert guidance and infrastructure.
In today’s tech-driven environment,
that infrastructure is critical.
Advisers need systems that do more
than process cases, they need tools
that generate MI for Consumer Duty
reporting, streamline compliance
checks, and support omnichannel
client engagement.
The job of a club isn’t to push
a particular platform or way of
working, but to help brokers identify
what works best. As the market
evolves, the smartest DAs may not be
the ones going it alone, but the ones
who know when to ask for help. ●
