MIp20-21_1009.qxd 23/9/09 17:16 Page 21
Regulation | 21
circle6
circle6
Senior Management responsibilities disclosures include details of the independent buying their home, they receive advice, they
circle6
Financial Crime valuation, confirmation of the amount the receive choices and information and they are in
circle6
Compliance Monitoring Programme buyer is paying for the property and the ratio in a much better position to undertake their own
Data Protection policy and Business terms of the full market value. It should also research and be genuinely able to compare the
circle6
Continuity Plans state the confirmation of the terms of the market.
circle6
Risk Management tenancy and the length of time for which they However, the biggest remaining misnomer is
Conflicts of Interest policy can remain in the property. that the consumer is vulnerable and unable to
Introducers also need to be aware of how Firms also need to bear in mind that arrive at considered decisions with the support
regulatory matters affect them. It is currently consumers will have recourse to the Financial of their advisers. The term “vulnerability of the
acceptable to introduce a client or vendor to a Ombudsman, even under the interim regime. consumer” is grossly underestimating the
provider which is either FSA regulated or This is especially relevant to firms that give intelligence of the individual. It is a misused
even if they are currently exempt. However, it advice. and misapplied term often stated by
is vital that if the provider is exempt then Let’s make no bones about it, all firms Government - the then Housing Minister’s
sufficient due diligence is taken to ensure operating in the sale and rent back sector statement on SARB in October 2008 used the
that they are entitled to be exempt. This should expect to have to meet tough standards term “vulnerable” five times in almost as many
could include maintaining a database of of business conduct in order to achieve full lines.
buyers they pass vendors onto and authorisation and rightly so. But there is help
getting the buyers to sign a disclaimer out there and a good quality compliance Anomaly
which states their entitlement to rely support package will go a long way to gaining And yet the anomaly here is that some SARB
on an exemption. and maintaining these standards and making consumers are being put back to where they
sure that the sector reaches the professional always felt safest. Maybe they are the very
Prudent standards demanded of it. people that were arguably mis-sold mortgages
However, as when choosing when they exercised their right to buy, for
strategic partners in any area of Julian Sampson says: example. Were these the very people who were
the mortgage market, introducers Perception is a difficult thing to shift. We are all happy as Council Tenants and simply never
should remain prudent and guilty of it in some form or another, arguably wanted to be homeowners?
select them wisely. After all the in both our personal and professional lives. But And lest we forget the Government itself is
client remains the introducers the key to good business is looking past these operating - albeit unsuccessfully - a string of
and having a trusted, preconceptions and putting reputations to one public sale and rent backs via the mortgage
preferred partner can go a side in order to really evaluate what you are rescue schemes run by some councils and their
long way to ensuring that judging. Let’s be honest, the sale and rent back associated housing associations. Of course,
their clients receive the (SARB) market has always suffered from a some might argue that the deal is fairer with
service that reflects the pretty bad reputation. In some historic cases them but competition will often drive a
introducers own. this has been more than justified and that’s why bargain. Many SARB operators also now offer
Introducers should, at getting past this perception is the first, and equity shares down the line or an option to
the very least, be aware arguably the biggest, hurdle the industry has to repurchase, so are they really poles apart?
of the provider’s exit overcome.
strategy for SARB Sale and rent back has long suffered from The SARB market currently has over 60
schemes. This will adverse press and this now hampers its authorised businesses of varying shapes and
invariably give a acceptance into the financial services’ arena. sizes. They all come with varying specialisms -
good indication of Now this is no different from many other niche some with local knowledge, some with the
the values of the sectors of the market such as bridging finance security of sizeable funding; some with equity
provider they are and secured loans but the biggest and maybe splits; some with combined repossession
dealing with. closest example is that of equity release. suspension services or debt management. As
Firms giving The equity release market, over 10 years on the market matures the adviser - that is
direct advice from its development, is still somewhat assuming they are regulated to do so - can
will need to misunderstood and even misrepresented. It is genuinely select and advise on the appropriate
carry out a now a high class advised service for a specific recourse for their client. No-one is suggesting
comprehensive consumer. It has benefited from regulation and that SARB is the answer for everyone (look at
factfind. This a desire amongst its stakeholders to improve its the RPS website for a clear statement by way of
should include: proposition. Nevertheless it still carries a small example) but it now should become part of the
income and essential expenditure; the vendor's hangover amongst some intermediaries several adviser’s arsenal and should be viewed as a
needs and circumstances; whether or not a years on. valid option for the right client.
SARB agreement is in fact the most suitable As an intermediary, assuming that they
course of action for them; consider Perception haven’t varied their permission, I would be
recommending debt management, if relevant. This example helps illustrate just how large the looking to either use an affiliation that their
perception hurdle is and at a time when the network may have established or alternatively
Warning distressed consumer’s voice is being heard look to establish an affinity with a company
All firms should ensure vendors receive a clear louder than ever before in a tough economy. that has substance and a good operational team
warning to take independent specialist advice. This is, and will continue to be, frustrating to be able to proffer appropriate advice and
It is mandatory that the vendor must be able to because in principle a regulated sale and rent assist the consumer. The intermediary, without
consider the disclosures and warnings made by back firm should now be a safer bet to deal permissions, must thereafter be careful where
or on behalf of the provider that are covered in with than it was pre-July 2009. This is, of he or she steps because the FSA are reviewing
the FSA Handbook under MCOB 5.9.1R before course, thanks to the FSA’s intervention. the regulated perimeter in this sector very
they enter into a SARB agreement. These Consumers are now fully aware of just who is carefully.
www.mortgageintroducer.com October 2009 Mortgage Introducer
Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44