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Letters | 9
listed which in turn will give you the focus of
what actions you need to take next.
Question: I have read about the new FSA
regulations for the Sale and Rent Back market
but I am confused as to what is needed to be
able to operate in this potentially rewarding
Your say
market sector. What do I need to do to get
FSA authorised, which we think will be
expensive, and what other options are there?
Vent your spleen simply by writing to or emailing me each
We have our share of clients in trouble
through no fault of their own, nor have we
month. Discuss industry topics, respond to letters, or write
given poor advice I might add, but we need to
open letters to the Government – I'll pass them on. This is
do something to help. We are currently FSA-
authorised for mortgage and general
your opportunity to have your say
insurance advice.
The seven deadly sins of GI the firm the get out to pay ongoing commission
Answer: To obtain interim FSA on in force business.
authorisation to operate in the Sale and Rent Dear Nia, And then there’s Greed – Gordon Gekko said
Back (SRB) market, I assume as advisers and General insurance is in the news more than ever ‘Greed is good’ in the hit 1980s movie Wall Street
arranging for clients to enter into a Sale and in recent months as IFAs, brokers and other inter- and it seems that some GI firms are taking this a
Rent Back agreement you will need to apply mediaries look for additional income streams to little too literally by reneging on agreed buy out
to the FSA for a variation of permission extend their proposition and cover the gap left by deals, and refusing to pay commission into retire-
(VOP). The FSA has stated that firms can use the drop in mortgage business. The headlines ment. If a firm agrees to purchase your GI back
the existing VOP application form for aren’t always positive though - the FSA is again book for an agreed price then it should not
mortgage firms plus certain sections from the turning its icy glare on unscrupulous practices in weasel out of stage payments that are no fault of
new (currently draft) SRB application. Your MPPI for example, and pride, envy, greed and the selling broker. As for paying commission into
application will need to be supported by a sloth have all been in evidence of late by some GI retirement, there’s no foundation in regulation
business plan, financial projections, systems providers. for not paying these out. If the broker remains
and control procedures, a compliance Let’s take Envy for example. Envy is a terrible liable for the advice they’ve given into retirement,
monitoring plan plus information as to how thing and has a nasty way of clouding your judge- then they should be able to continue to receive
you have amended your Training & ment. One of the larger GI providers, it has been the ongoing renewal commission, simple.
Competence scheme to include SRB business reported, confirmed that it is reviewing the con- It’s sad that we are increasingly seeing examples
as a minimum. See the FSA’s website re: sale tractual arrangements in place with those net- of the Seven Deadly Sins rising to the surface like
and rent back which has the full information. works where they are no longer on the network a bad smell. It’s a difficult market for GI providers
To answer the second part of your panel stating rather piously that the trail commis- and brokers alike, but long term these short sight-
question, you can become an introducer to an sions are a goodwill gesture as they have no con- ed unprincipled practices only serve to further
authorised SRB firm providing basic contact tractual obligation to pay them where a network erode the trust and reputation of our industry. It’s
details; the SRB firm will then advise your ceases its arrangement with them. Trail commis- time to stop the rot.
client and most SRB providers, such as RPS, sion is not paid as a matter of goodwill, it is an
will pay you an introductory fee but not all enshrined part of the contract the brokers signed Kevin Paterson
will do so. up to in the beginning; simply because the net- sales & marketing director
Question: I have read comments made by work has chosen to restrict its panel does not give Assurant Intermediary
Assurant Solutions, the general insurance
provider, recently that authorised firms
Dear Nia the option ‘no I certainly don’t want to join, I’d
should make sure their client’s products, such
It’s well reported that the Conservative Party is just like some information’… I got put on hold.
as payment protection are: a) adequate; and
vehemently opposed to HIPs. The other central Because I have a day job to do, I didn’t pursue
b) not subject to re-underwriting with
tenet of its housing policy is to abolish Stamp my investigations any further. But it struck me
premium increase for less cover. As a
Duty on house purchases below £250,000, emi- that in fact, I’d stumbled across something of a
medium-sized mortgage and general
nently sensible to help ease the financial burdens metaphor. We need a leadership which is com-
insurance brokerage this potential adverse
on the first time buyers we desperately need to mitted to helping the housing market recover, not
change to my clients cover could have serious
truly kick-start the property market. one which is more preoccupied with dealing with
implications. What do you suggest?
For these reasons, the Tories are attracting a the fall out from MPs second home expenses! The
Answer: The trite answer is to speak to
considerable amount of support from the mort- sooner we have a general election, the better, and
Assurant Solutions who have access to a range
gage industry. then we can all come off hold and start turning
of high quality products. As you do not say if
In the interests of balance however and given green shoots into a proper recovery.
you have been using only one or two key
the turmoil in the hallowed halls of Westminster
providers, the next step has to be check your
right now, I thought it only fair to take a fresh Yours sincerely
client’s cover and try and ascertain whether
look at Labour’s commitments in this area. I con- Christopher Taylor
the provider has the intention to review cover
sulted the Party’s website to bring myself up to CEO, London & European
or not. The time spent doing this could be
date. There was no mention of Housing in their [And we mustn’t forget the Tory MP who managed
time well spent.
list of ‘policies at a glance’. Furthermore, with to claim for a third home – a house for his ducks!
You can contact Bill with your regulatory
Margaret Beckett off to tend her hanging baskets, Ed]
questions by emailing:
I could find no reference on the site to her
bill@billwarrencompliance.co.uk
replacement as Housing Minister.
If you want to reply to any of these issues or
Bill Warren is managing director of
I thought I’d go straight to the horse’s mouth
create issues of your own then email me at:
Bill Warren Compliance LLP
nia@thepublishinggroup.co.uk
and call the Labour Party itself. Having selected
www.mortgageintroducer.com July/August 2009 Mortgage Introducer
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