Four out of five asset finance brokers have said they found gaining authorisation from the Financial Conduct Authority (FCA) difficult, according to new research carried out by United Trust Bank.
More than half of finance brokers who took part in the survey said that they had expected it to be difficult and they found that to be the case, whilst a further 25% of brokers found the process to be more difficult than they had expected.
Q: Has the process of becoming FCA authorised been more difficult than you expected?
| I expected it to be difficult and it has been difficult | It has been more difficult than I expected | It has been easier than I expected |
| 54% | 25% | 21% |
Around three quarters of brokers are now on course to being fully approved but worryingly 16% are not sure what their situation is and 9% say they are not on course for authorisation.
16% of asset finance brokers who took part in the survey are considering not applying for full authorisation once the interim period expires and a further 6% are as yet undecided.
The research also revealed that over three quarters of brokers intend to stay independent. 16% said that they have already joined a larger broker group and 8% are considering the move. The good news is that not a single broker indicated that they were considering leaving the asset finance industry.
Q: Has the process of becoming FCA authorised caused you to consider joining a larger broker group?
| Yes I am considering joining a larger broker group | No I wish to stay independent | I have already joined a larger broker group | I am considering leaving the industry |
| 8% | 76% | 16% | 0% |
Martin Nixon, head of asset finance at United Trust Bank, said: “We thought that there would be a lot of work involved for brokers to get fully FCA authorised and this research confirms that some brokers may have under estimated what needed to be done. The good news is that three quarters are on course to being fully authorised. It is somewhat concerning, however, that one in five brokers are still either considering not applying for full authorisation or are as yet undecided. The clock is ticking.
“The research also revealed that the authorisation process has persuaded some brokers to give up their independence and join larger broker groups with the loss of independence and sharing of commission being balanced against the assistance with authorisation and possibly access to a larger funding panel.
“Overall the survey demonstrates that brokers have proved their resilience and adaptability to the challenges put before them and the industry as a whole can move forward with renewed confidence.”
