A benefit of taking up a new job is that you have the opportunity to ask obvious questions, which I have been doing during the first few weeks of my role at the Association of Short Term Lenders. One of the questions I have been asking 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, among other things, that all members operate in a manner that is transparent, fair and reasonable, with all costs and fees to be charged 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.
Setting the tone
It is no coincidence that the principles of the ASTL code of conduct align closely with those 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.
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. 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 among lenders will help to stave off any demanding legislative intervention in the future. This isn’t just a defensive manoeuvre. The more lenders that align to the ASTL’s code of conduct, the more we can enhance the reputation of the market and stimulate the growth of our sector.
The bridging market has evolved to become a 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. 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. It is clear that we can do more to promote the code as a way of demonstrating that bridging is a market in which brokers can feel comfortable providing advice and with which they want to be associated.
Therefore, 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 demonstrates a 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, chief executive, ASTL
