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The NACFB is the only UK trade body dedicated to the commercial finance broker. We represent members from across the whole commercial finance market: from buy-to-let specialists and commercial mortgage advisers to vehicle finance brokers; from leasing and asset finance specialists to factoring brokers. All NACFB members comply with an industry recognised Code of Practice
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Commercial Brokers concerned about ‘one trick ponies’
16th April 2007
Members of the National Association of Commercial Finance Brokers are worried about less experienced brokers entering the market and not offering best advice to their customers.
The Association has received a number of calls from its members raising concerns that some businesses are not necessarily receiving the best advice. Association members are receiving enquiries from clients who have been put to a sub-prime lender by inexperienced brokers because they are an easy route to market.
Associate director, Adam Tyler, said: "Members are seeing an increase in cases put to them with clients who can supply the necessary accounts and don’t appear to have any adverse credit registered against them and yet have been put to sub-prime lenders by inexperienced brokers. Sub-prime commercial lenders have done a fantastic job of shaking up the commercial finance market; they offer specific, recognisable products - like a residential mortgage lender does - which means that an inexperienced broker can find them much easier to use than the standard commercial lenders. But as sub-prime rates and fees are usually higher than those available on the high street, unfortunately this means that clients are not necessarily getting the best advice for their situation. Rather than properly investigating the market and finding the best deal available for their client, some inexperienced brokers are becoming ‘one-trick ponies’ and simply pushing all their commercial deals to one lender."
Tyler continues: "NACFB broker members must comply with a Code of Practice, and need to demonstrate that they use a variety of lenders for their business clients. The Association has recently tightened its membership criteria so that any broker who simply pushes every deal to one lender is identified and, unless they are able to prove they operate in a very specific market, these brokers are excluded from becoming full members of the Association. At the current time the commercial market is largely unregulated, but if this problem becomes more widespread it is this kind of activity that will attract the attention of the FSA. Ultimately, if a consumer is concerned they would be wise to look for a broker who is a full member of the NACFB."
Kevin Jones, NACFB Director and Director of commercial finance brokerage, Omega Financial Services, said: "This initiative has been taken to ensure that the core values and original membership criteria of the association be reaffirmed to ensure that NACFB commercial broker members are seen by the public and industry as a whole as offering a comprehensive, well informed advice and access for their clients to the complete range of commercial mortgage products."
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