A growing number of leading financial service providers are making their voices heard on the subject of unregulated brokers casting a shadow on the industry. Until recently, brokers and lenders offering advice and financial products to borrowers at all levels have faced very few consequences for their actions. This, despite putting their clients and customers at risk and contravening long-established industry standards.

Now however, those who continue to provide financial advice or products without regulation may find themselves in the firing line of the Financial Conduct Authority. Recently issued statements from the FCA suggest that the authority intends to take a more proactive and aggressive approach than ever before, in both identifying and reprimanding those who operate without appropriate regulation.

A Warning to Borrowers, Brokers and Lenders

‘A large percentage of the problems we have witnessed in the industry, from the crash of 2008 onward, have been caused by regulated brokers participating in activities that are outside the ‘regulatory perimeter’. However, our resources are limited and it is therefore essential that we use them as effectively as possible in order to maximize our impact. If our objectives are endangered by unregulated bodies then we shall be forced to operate outside the perimeter wherever necessary.’ – FCA (Financial Conduct Authority)

As far as the FCA is concerned, the unscrupulous actions of unregulated lenders and brokers are leading commercial and residential customers in their thousands down a dark and dangerous path. Having failed to obtain or perhaps even qualify for regulation, such service providers are fundamentally unable to guarantee the high-quality advice, support and financial solutions available elsewhere. Just as unregulated service providers are being warned to immediately cease all such activities, potential borrowers are likewise being advised to exercise enhanced precaution when sourcing and selecting both brokers and lenders.

Unnecessary Risk

Every time a borrower works with an unregulated broker or financial service provider, they put themselves and their financial future at entirely unnecessary risk. Despite on-going warnings from the FCA and other authorities not to work with any providers whatsoever that are not fully regulated, evidence suggests it is advice that is going largely unheeded. As a means by which to bring the problem under control therefore, the FCA has confirmed its intention to actively pursue those who are not playing by the rules and ensure their operations are stopped.

One of the UK’s leading brokers of intelligent, alternative financial solutions has voiced its support for the proposed action of the FCA, having spoken of how unscrupulous activities cast a shadow on the industry as a whole. UK Property Finance is an FCA-regulated financial services provider, specialising in bespoke financial products for commercial developers such as bridging loans.

As the UK continues to enjoy a period of incredibly low interest rates across most loans and financial products, UK Property Finance advises members of the public not to dive into even the most attractive deals, without first considering the status and viability of the broker or lender.

Echoing the warnings of the FCA, those that do not carry full regulation are to be avoided at all costs and without exception.

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