One of the benefits of taking up a new role is that you can arrive at an organisation with a fresh pair of eyes and have the opportunity ask obvious questions, which is much harder when you have been in situ for a period of time.
This is an approach that I have taken during the first few weeks of my role at the ASTL and one of the questions I have been asking of members, associate members and other interested parties in the short term lending industry is, what are our strengths as an association?
A common response is the rigorous process we go through before accepting members. Our Code of Conduct means that membership of our association is very much a kitemark of quality.
The ASTL’s Code of Conduct has been a key part of the association since its beginnings in 2008 and it is reviewed regularly to ensure it remains relevant and consistent with the highest of market standards.
The Code requires, amongst other things, that all members operate in a manner that is transparent, fair and reasonable, all costs and fees to be charged should be disclosed before carrying out any lending business, and that all fees and commissions payable to a financial intermediary, broker or third party in connection with the customer’s loan, should be disclosed to the customer.
It is no coincidence that the principals of the ASTL Code of Conduct align closely with the principles of FCA regulation. In lieu of full market regulation, the ASTL Code of Conduct sets the tone for the industry and is there to inspire trust and confidence.
After all, in an unregulated environment it is possible for a lender to set up without proper processes or adequately trained staff and standards of conduct, transparency and professionalism can vary dramatically. We trust that this is unlikely to be the norm, but the code helps to underpin the need for consumer protection.
In many ways the ASTL’s Code of Conduct imposes a form of self-regulation that can provide and demonstrate a kitemark of quality. It means brokers and their clients can have confidence that if they choose a member of the ASTL, the lender will subscribe and adhere to certain standards of behaviour, and I would suggest that ASTL membership is something that all brokers should look for when choosing a lender.
And while the prospect of regulation may not be on the immediate horizon, a collective commitment to quality lending amongst lenders will help to stave off any potentially heavily demanding legislative intervention in the future.
This isn’t just a defensive manoeuvre. The more lenders that align to the high standards set by the ASTL’s Code of Conduct, the more we can enhance the reputation of the market and this can help to stimulate the growth of our sector.
The bridging market has evolved to become a very useful source of funding for a number of investment and business scenarios, and the competitive lending landscape has helped to make bridging finance more attractive for borrowers. But, when it comes to distribution, we are still relatively limited and this is impeding the growth of the sector. Consequently, there is a general consensus that bridging lending will only truly realise its full potential for growth if more brokers enter the market, and we can encourage more brokers to enter the market, if they have greater confidence in the sector.
This is where the ASTL Code of Conduct comes in and is clear that we can do more to promote the Code as a way of demonstrating that bridging is a market in which they will feel comfortable providing advice and with which they want to be associated.
So, if you find yourself having to choose between bridging lenders for your clients, ask yourself whether those lenders are members of the ASTL. Our Code of Conduct is a kitemark of quality that can give confidence to you and your clients. The more impetus we can put behind the Code, the greater the opportunity it has to inspire the growth of the bridging market.
Vic Jannels, CEO of the ASTL
A version of this article appeared in the January digital edition of Mortgage Strategy