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March 2009

Regulations: no benefit to us


I have just read Paul Smith’s article on the licensing of estate agents (EAN, February) and I have to say that I completely disagree with what he and Bill McClintock are saying.

The only people who are benefiting from regulations are the Government and the licensing bodies who collect fees and charges, which we then pass on to our clients.

At present, we are all regulated by the Ombudsman service which has been quietly increasing its regulatory powers to where now every agent has to be a member of this regime at a cost. Letting agents have also been dragged in and now we are starting to get increased costs which will once again be passed on to our clients.

If we look at financial services regulations which have been around for some time, we can see how much damage this has done to our industry and to Mr Anybody who used to be able to get advice from reasonably-qualified advisors who worked for companies such as Prudential, Royal London, Liverpool Victoria, Commercial Union, Royal Insurance, Sun Life and many more.

They employed tens of thousands of salesmen, but these have all now disappeared and we are left with a few IFAs (I was one) who only give advice to the wealthier members of our society.

Poor old Mr Anybody can no longer get this advice except at an ever-increasing cost because there are fewer advisors and businesses around to provide competion, hence the reason for the massive fall in pension contributions, ISAs and general savings.

The same will apply to mortgage advice. The banks who are licensed have made a complete hash of the money markets and the tax payer is going to pay for it by way of higher taxes of every description and reduced pensions.

The only people who will suffer will be the Mr Anybodies of our country and of course the mortgage advisors who will leave the industry in droves because they can’t get mortgages for their clients and do not earn any money for themselves (I am one).

Finally, if we look at Home Information Packs, another money spinner for the Goverment by way of more fees — £80 for a registration and a minimum £60 in VAT — no-one wants to pay it; no-one even looks at it.

I have asked the staff in our offices if anyone has ever asked to see a HIP since they were introduced and the answer was one woman who, when given a copy, asked: ‘What does all this gobblegook mean?’.

How much greenhouse gas has been produced in compiling this junk? When regulation comes, this will be a nail in the coffin of independent agents as they will not be able to meet the cost of training and exams for all of their staff.

This is what closed down the sales forces of the Prudentials of our country.

Less competition equals bigger groups equals higher prices and poorer service.

Thank God I am nearing retirement (I don’t have a pension).I will be retiring abroad and the sooner the better.

Chief executive,
LFS Group,
Ormskirk, Lancashire.