MI_25_regulation.qxd 27/2/09 11:14 Page 3
Regulation | 25
The
compliance
challenge
Ann Dempster, managing director of Plum Software,
looks at how advisers can protect themselves from FSA fines
recent survey conducted by Pink when there is a negative news headline, you have Redemption Penalty and Fixed Rate End Dates.
A
Home Loans revealed that 82 per to try to remember which clients are still with As well as using To Do lists to diary forward,
cent of intermediaries have not the lender, search through the paperwork to get a tracking can be used to enhance your To Do lists.
changed their approach to com- feel for how much longer they have got with You can set up tracks for all sorts of functions for
pliance - even though the num- their existing mortgage, and then start to think example managing TCF and compliance, tracking
ber of fines and bans imposed on about what advice to give. But you can easily the mortgages and policies and for ensuring that
firms or individuals by the FSA ‘skip’ the first two steps with the right broker you record all your processes in a systematic way.
has increased (32 in 2008 thus far, compared to software, which can give you that information on
23 in 2007), as well as the size of the fines – more demand. Treating customers fairly
than £12 million of fines were handed out in Once you make a decision to reduce your Amongst other things, TCF involves making
2008 compared to £5 million in 2007. reliance on paper and memory, it is vital to do it statements to your clients as to how you will
So how should brokers change their approach properly. Simply storing documents into folders service them. If the procedures are set up in a
to ensure they don’t get censured by the regula- and sub-folders in the PC only serves to electron- track, you can record when you did what you
tor? Each firm has their individual approach to ically replicate the weaknesses caused by storing said you would do. You can set up the events for
how to run their compliance function – we’ve paper in filing cabinets. You still need to remem- the appropriate reminder dates, which could be
spoken to thousands of firms over the years, and ber which client is with which lender and then relative to other dates, and for the appropriate
there are always variations in their practices. look through the paperwork. person or department. All these events can be
However, the response that worries us most is automatically recorded in the diary so that you
when firms tells us “we use a paper-based system, Proper database can instantly see all events associated with a
we’ve managed to pass all of our compliance vis- Key documents and facts need to go into a prop- client, policy, lender, consultant etc.
its so why would we need to change?” er database structure where everything is cross- Tracking the mortgages and policies using
referenced. For example, a diary event that links checklists linked to the To Do list can enhance
Constant changes to the client, mortgage, lender, date, adviser, the administration processes. Whilst getting
The advice marketplace is constantly changing, administrator, any comments, type of event, automated reminders, you can rely on your sys-
and what worked in the past will not work forev- description, and so on, that incorporates any tems, not memory or remembering to tell a col-
er. FSA reporting requirements become more associated documents, emails, scans, correspon- league about an event, to enable efficiency. Tracks
onerous each year, and the need to justify how dence etc. - can be instantly viewed in hundreds, are very useful for job sharing and for delegating
each individual client is being treated is getting if not more, of different options. work as all the information – reminders, docu-
tighter. To collate information manually takes It can be analysed, included in statistics and ments, details of clients, mortgages and policies,
time – and if you have any aspirations to grow, management information, used to see shortfalls diary notes etc – is all in one place with easy
the task will eventually swamp you. and it helps to understand your clients as indi- access. It also greatly enhances the training of
Quality of life for you and your team is also viduals and as a whole. new staff as they can see the procedures easily.
important. With manual systems, so much But this is only the beginning. Once the infor- When your back office system starts to func-
relies on memory. If information is locked in mation is properly out of the filing cabinet, you tion for the business the way you want it to run,
one person’s head, however good they are at their can really start to put the information in your you’ll find it much easier to manage and delegate
job, you’ve created a weak point in your firm. business to work. That’s why it’s so essential to work, and you may well get much better job sat-
choose the right system for you to progress the isfaction.
Assess information business. Finally – and most importantly – you’ll have a
If you want to assess how many clients are with a To Do lists can be used to manage your day lot more time to do what you really should be
specific lender and what their exposure might be with automatic links to Next Review, Mortgage doing – advising your clients.
www.mortgageintroducer.com March 2009 Mortgage Introducer
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