FLA launches broker accreditation scheme

The Finance & Leasing Association (FLA) has announced a new service offering funders a single-source broker review, streamlining the checking process for working with intermediaries, in a move designed to reduce the cost and time required for lenders to demonstrate that core compliance requirements are being met.

Speaking at the association’s annual dinner, FLA chair John Phillipou said the service, branded ‘FLA Accredited Broker’, would ‘help participating brokers demonstrate best practice through alignment with our Business Finance Code and compliance with FCA regulations.’

‘It’s an efficient check for funders who are ever more challenged to evidence that they work professionally with brokers, and most importantly, our customers will benefit too,’ explained Phillipou, who is managing director of SME Lending at Paragon Bank.

According to information on the FLA website, to become an FLA Accredited Broker (Asset finance), the broker will be assessed by the FLA’s Funder Analysis Service provided by X VAS, a specialist asset and inspection provider.

Accreditation lasts one year and then requires renewal annually. Asset finance brokers will be charged £995 plus VAT for the service. If they commit to using the service for three years, they will be charged £849 plus VAT per year.

Brokers who sign up in the first three months of launch will receive a discount and be charged £749. Asset finance brokers can also become associate members of the FLA, separate to using this service.

The FLA says using this service will enable brokers to demonstrate compliance with FCA regulatory requirements to customers and FLA funders.

It will also save time by filling in the required information in the FLA’s Funder Oversight Service just once, rather than multiple funder regulatory reviews for each lender.

In addition, brokers can access tailored training at a discount, attend regulatory briefings, and get involved in the FLA Asset Finance Broker Review Forum, which is being set up as a forum to discuss the service and shape improvements and future developments. Inclusion in the system also increases brokers’ visibility to lenders looking for partners.

Stephen Haddrill, director general of the FLA (pictured at top) said: ‘Intermediaries are an important part of the industry, and the new Accreditation Service will help us work smarter with our partners for the benefit of our customers.’

Background

The FLA announcement comes against the backdrop of the ongoing FCA investigation into historic commission agreements in the motor finance sector. Phillipou said the FLA ‘has for months been working behind the scenes with the FCA, Financial Ombudsman Service and the Treasury to find a way forward on the commissions issue.

‘The pausing of complaints handling, announced some weeks ago, was a welcome intervention, and provides space for genuine complaints to be resolved and for certainty, clarity and consistency to be restored to the sector,’ he said.

phillipou john

Looking at the wider regulation picture, Phillipou highighted the urgency of reform to the Consumer Credit Act, now fifty years old, and which he described as ‘incompatible with the Consumer Duty’.

The FLA chair also emphasized the need to balance tighter regulation with consumer need, saying: ‘The call for proportionality in regulation is sometimes dismissed as a plaintive cry from industry, but the effect on our customers is real.

‘In the consumer credit sector, increasingly stringent affordability requirements have excluded many former customers from the market. They are creditworthy, they can afford repayments – but they do not fit within the parameters set out by the regulator. The FCA has noted the problem, but we want and need to see action to restore access for this group.’