The Financial Services Authority has sought help from the mortgage industry to build an individual regulation system for advisers after admitting it was unable to construct one.
Responding to an open letter from the Cherry advisory forum, which criticised the FSA for delays in introducing individual registration in the mortgage advisory market, Sheila Nicoll, outgoing director of conduct policy for the FSA, said the City watchdog understood the frustation.
She said: “We too regret the delay in introducing individual registration for mortgage advisers and understand the industry’s frustration
“The complex changes around the reform of the UK regulatory structure have had an impact on our regulatory system, including the online notification and applications system, which is a key element in successful implementation of the new regime.
“We do, however, want to see if an interim solution can be developed, which is why we have sought and welcomed suggestions from representatives of the industry as to how to develop one. “We are actively working with them and are keen to support a solution that can be implemented in a reasonable timescale.”
While welcoming the response, Donna Hopton, founder of Cherry, warned that if the industry provides a solution, this could increase costs for advisers.
Ms Hopton said: “If the trade bodies do this, something which, by rights, the FSA should have paid for, they are going to want their money back from somewhere.
“What must not be allowed to happen is for the cost to be passed back somehow to advisers for example by trade body joining fees, compulsory trade body membership or otherwise.”
A follow up email from Ms Nicoll to Ms Hopton, said: “The trade bodies (including the Association of Mortgage Intermediaries) are working together to come up with a solution, and I’m sure the overall effect on the market will be a factor in their thinking.”
It comes as Robert Sinclair, chief executive of Ami, said the first meetings between trade bodies on an individual registration system would be held in March.
Earlier this month, hundreds of advisers urged the FSA to speed up the introduction of an approved person regime for the mortgage market.
This took the form of an open letter to Martin Wheatley, incoming chief executive of the Financial Conduct Authority.
The letter, signed by 400 members of the Cherry community, a portal for mortgage and financial intermediaries, claimed the lack of individual registration harmed the image of the property market.
