Questions from hell
Crystal ball gazing criteria and regulation changes
by Bill Warren, managing director, Compliance LLP
Will 2011 will be as challeng- ing as 2010 or are the more positive signs and noises be- ing seen and heard so far real signals of an improved mort- gage environment in 2011? It certainly seems that way with new and well-respected lend- ers returning to the market place with new product offer- ings and seemingly adequate funds available. Funding does seem to be
improving followed by some lenders’ criteria easing slight- ly; it appears to be evolving in
Q A
the right direction. Demand especially for remortgages is building up a strong head of steam and this will be where the strength of improvement will be tested - can lenders of- fer competitive products sup- ported by serious funding to meet this demand? Only time will tell I suspect. There continues to be
much discussion about the MMR and the RDR especially in the political arena which is encouraging as slowly as understanding of the issues sinks in positive views and changes are appearing which can only help the intermedi- ary sector. No doubt AMI will be sending, or have already sent, a robust and construc- tive response to the last con-
There has been some confusion and comment in the trade press about the
letter which the FSA sent to a number of firms in Q4 2010. We advise on and sell several general insurance products, but have not received this letter. Should we have and if so what do we need to do?
The letter was sent by Sheila Nicoll, director conduct policy division, at
the FSA, dated 29th November 2010 and addressed to the Compliance Officer. It was aimed at ‘All firms selling non-investment Insurance Protection Products’. The letter includes a statement that: “We are
therefore writing to all firms that sell protection products, further defined as pure protection contracts and payment protection contracts (PPI).” If you do fall into this category I suggest you obtain a copy and respond to the FSA as requested in the letter. You need to review your sales policies and
procedures re: compliance with ICOBS, and provide the FSA with written confirmation within six months (by end of May 2011) that you have carried out a review and that your sales policies and procedures are compliant with ICOBS.
Q A
sultation paper and I person- ally believe the FSA will be listening closely to what is said along with all the other responses from the mortgage intermediary industry. Sadly stories of mortgage
and general fraud still abound as they are ‘squeezed’ out into the open either by the FSA or the courts. The need for vigilance by intermediar- ies and providers in relation to anti-money laundering is taking an increasingly higher profile. This type of focus plus the FSA’s tightening up of the approved persons re- gime, through the improved approach to the appointment of non-executive directors, internal audit and risk man- agers effective from the first
I and my business partner are reaching an age where we seriously have to think about
retiring and would like to sell our partnership. I have read many articles in recent months regarding firms going out of business as they can’t find someone to buy their firm for a realistic price. Can you suggest an individual or firm that I could approach?
There are many commercial enterprises I suspect who might be interested if the
price is mutually acceptable. The only firm that I have some personal limited experience of is “Tomorrow Ltd” run by accountants and an ex-IFA based in Wales. In the IFA world there are a significant
number of IFA consolidators in operation all acquiring firms in the run-up to, and beyond, RDR. Perspective Financial Group Ltd, based in Wilmslow, is one I constantly hear good things about. Firms submitting applications will need to
address each of these points very carefully to convince the FSA, should they need to, that an individual is suitable. This would include taking references if appropriate, undertaking credit checks, providing evidence of competence e.g. CPD records or appraisal
may all add up to the intense supervision often referred to. In January the FSA issued
a policy statement PS/11/01 relating to professional stan- dards which has generated much debate and discussion not least between the FSA and certain other profession- al bodies involved in deliver- ing the requirements. The result may be a requirement for a further qualification for mortgage advisers; however subject to the MMR it appears there is less change than in other areas of financial ser- vices. This all adds up to chal- lenges for the intermediary sector but the opportunity to deepen and enhance client relationships increasing the loyalty factor is vital as always.
documents and perhaps an assets and liabilities statement, along with a disclosure from the CRB for single directors and sole traders. If you haven’t looked at a FSA Form A (application for approved person status) for a while it would be worth doing so particularly as the FSA will be adding questions shortly relating to home finance firms and business.
Q A
Much has been made of the MMR proposals relating to affordability. Now
we have a changed “benefits” approach from the Government can you suggest a source that I can approach that will provide me with some practical guidance? I undertake some sale- and-rent-back advising and arranging so it is important I fully understand the implications.
Your local benefits office should be able to help you, although I suspect
from your communication you may have already tried them. Ferret Information Services would be a good place to ask; as you may know it produces a lot of information for the home reversion/equity release market and papers for a range of related organisations on the practical impact of benefits.
MORTgAge INTRODuceR MARCH 2011 21
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