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Mortgage chief warns on outsourcing - 00/00/0000:
Contracting out regulated activities such as compliance services will result in unnecessary confusion for brokers after M-day, a mortgages expert has warned.
Purely Mortgages chief executive, Mark Chilton, says that brokers which farm out compliance will be sending mixed messages to consumers, the MoneyMarketing website reports.
Under the new regulatory regime, brokers will be forced to reveal which company they are an authorised representative for.
However, it is not yet clear whether this will be their parent group or the company that oversees their compliance.
Self-cert and sub-prime specialist Ethical Mortgage Solutions has passed all its compliance and network responsibilities to Mortgage Next, which becomes principal to Ethical's 120 franchisees.
Ethical Mortgage Solutions chief executive, Steve Royal, said: "This move has freed us from having to run a compliance team so we can focus on what we do best.
"The responsibility for any compliance problems will lie with the principal."
Mr Chilton commented: "Who do these individuals end up being appointed representatives of and how will this be disclosed to consumers? This is one of the issues with sub-contracting regulated activities.
"It is very unlikely that Mortgage Network would take the liability for members if Ethical were to go under."
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