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18 | Regulation
Questions
always wonder who actually carries out these
reviews, presumably the FSA themselves?
Bill answers: I suspect many others have
wondered the same, unless of course they have
had the experience themselves. The reviews are
called a section 166 report within the
FSMA2000 and have to be carried out by a
from hell
suitably qualified and experienced
person/individual(s) either nominated by or
approved by the FSA. The regulator will also
normally stipulate the format of the report
required. In recent times concerns have been
expressed by firms who have been subject to
such reports that those 'persons' carrying out
the reviews have little or no mortgage
A New Year arrives with the
experience or qualifications, something no
doubt the FSA are addressing if true. More
return of an old favourite to
firms are taking the bull by the horns and
having reviews of this nature carried out on
Mortgage Introducer.
their businesses by qualified compliance people
to prevent potential problems at a later date.
'Questions From Hell' tackles Direct vs whole of market
all your mortgage and GI market
Q2. The very recent issue of 'lender direct'
products and access to the whole of market has
regulatory queries courtesy
generated a lot of trade press coverage, with the
FSA and AMI in particular commenting. As an
of Bill Warren
objective compliance person what is your view?
Bill answers: My objective view is that the
issue of dual-priced products has always been
around but in the current market with lenders
2
008 was a horrendous year for the FSA Small Firms Division being on mortgage saying they have limited funding not
financial services industry but in and general insurance firms' quality, and unnaturally they are seeking to trade direct to
the last few months the mortgage with other key divisions of the FSA focused generate more income for themselves as
industry in particular was notable on lenders and product providers, the everyone knows. Much depends upon the
for the re-birth of some lender likelihood of new initiatives impacting the broker's business model but ethically and of
exclusives for the intermediary mortgage and general insurance arena has to be course, seeking to treat customers fairly, I
market place and continued reduced. believe the broker should make every effort to
assurances from the FSA that the Retail So 'business as usual' is crucial from a find the product that best fits the clients' needs
Distribution Review (RDR) would not auto- regulatory point of view but those firms who and circumstances. The Home Buyer System, at
matically apply to the mortgage arena. Cynical have had to cut back in some way to survive a very sensible cost, for example has made
responses of disbelief on a postcard to Lord and are now trying to do the same in 2009 can gaining access to the detail of such products a
Turner please. perhaps do so not having to look over their lot easier for brokers. Charging a fee for the
With so many experts much cleverer than I shoulder expecting some unexpected regulatory advice and research is not new and for those
predicting that 2009 is going to be an even requirement to hit them with the attendant who have gone down that route, despite the
more difficult year than 2008, I am not going costs. To a large degree we know what is historical barriers, this can only further their
to buck the trend in relation to the mortgage coming apart from 'business as usual' and that survival chances.
market and the immense challenges those is a review of the Mortgage Conduct of
within the mortgage industry are going to face. Business section of the FSA handbook. With Gazundering
But I am going to predict, perhaps through an over four years of mortgage regulation behind Q3. With the market as it is currently are you
excess of optimism and unfortunately not due us, MCOB should have become a way of life. surprised that there hasn't been more publicity
to an excess of new year 'cheer', that the The FSA have indicated that they do not wish about the practice of 'gazundering'?
regulatory burden on mortgage firms will seem to damage an already fragile sector of the Bill answers: You have touched a raw nerve
less in 2009. Why do I say this, when market, it would therefore be reasonable to with that question as I have experienced this
throughout 2008 treating customers fairly, as assume the improvements to MCOB will be just recently while trying to sell and move. The
the prime example, has continuously remained sensible and cost neutral. practice is very annoying for those involved but
so high profile, alongside the quality of advice Now back to the day-to-day issues that there is little a mortgage adviser can do other
and record-keeping, mortgage fraud and the impact us all currently. than ensure close contact is maintained with
RDR, from a FSA perspective? the client.
Well, maybe in part because those issues Who carries out reviews?
have been so high profile in 2008 and TCF Q1. Several of the enforcement notices issued Bill Warren is managing director of Bill Warren
became part of 'business as usual' from 1st by the FSA in 2008 especially, have required a Compliance LLP. If you would like a question
January 2009. Therefore, it is not unreason- review of past business to be carried out by the answered by him please email:
able to assume that with the focus of the firms. I understand why in most cases but I
bill@billwarrencompliance.co.uk
December 2008 - January 2009 Mortgage Introducer
www.mortgageintroducer.com
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