Likely Cold Calling Ban Will Hit Intermediaries Hard - Says Mortgage Broker

His call comes hot on the heels of FSA plans that reveal a possible future ban on cold calling as a route to generating new business.

According to Birch, mortgage intermediaries are worried that a potential ban would lead to significant unemployment in the financial services industry, as intermediaries struggle to find sales channels to replace the unprompted

tele-canvassing of new customers. 'The latest draft rules within CP146 are designed to bring the mortgage industry in line with other investment regulations by prohibiting cold calling as a new lead generator,' says

Birch. 'If this goes through, it will have a devastating effect on the income levels of some lenders, as well as many brokers' profit margins.'

'If the FSA rules are passed in their present form, the next few months will see intermediaries strive to find ways of replacing this potential lost business. Any alternative sales channel will need to provide a solid first

point of contact, so that advisors are fed good quality leads from reliable sources. Franchising is an ideal solution, because it offers the ability to access a ready-made database of prospective clients, all of which are

willing buyers of financial services,' adds Birch.

'Moreover, taking on a financial services franchise allows intermediaries to concentrate on maximising their selling opportunities, without the hassle of

worrying about compliance issues, as these are all dealt with by the franchisor,' he states. 'This makes the franchising model particularly attractive should cold calling be outlawed, because it can be adopted by

intermediaries as an instant plug and play solution, without any complex training or regulatory requirements. Franchising is therefore a cost-effective way of building a financial services business from scratch,

as it allows the intermediary to deliver high quality advice from day one, allied to controllable costs,' concludes Birch.