Gordon Findlay, senior associate at the FCA, ran through the points at the Legal and General Mortgage Club roadshow held in London this week.
We’ve rounded up Findlay’s general areas for consideration here:
Customer engagement
“Customers want to engage in different ways and what we sometimes see is that firms don’t take a real step back and look at what they do in that area,” Findlay said.
“The examples from our consumer research would suggest that while you as a broker might be thinking about the initial disclosure, they’re actually thinking about their dream house, the wallpaper, the fact that they can put a trampoline in the back garden, and so forth. Firms should be thinking about how they can do something really engaging and bring the customer on board with the whole transaction.”
Customer information
“In our thematic work, almost 40% of the files we checked were rated as unclear, and by unclear it meant we weren’t able to see whether the advice was suitable or unsuitable,” Findlay explained.
“That could be because there was a piece of missing information, or the right questions hadn’t been asked so there weren’t enough of the hard facts or enough of the soft facts – meaning that even though the conversation took place, it wasn’t documented. If that file is given to an internal or external file checker, they don’t know the client and we don’t know them either.”
Findlay also warned that failure to file customer information properly could come back to cause problems for brokers at a later date: “If an issue results in a customer complaint, it could ultimately end up with the Ombudsman.”
Written communication
“This spans across the first two areas in its own right, whether its about the information or documentation you give. A good example of written communication is the suitability report and that has to be fair, clear and not misleading,” said Findlay.
He added: “There is guidance and information on our website that’s primarily for investment advisers because the suitability report is a requirement for them, but there’s lots of good high level generic stuff that can be used to improve that communication.”
