Risk is also a strategy based board game invented by French film director, Albert Lamorisse, which was originally released in 1957. Basically this version of Risk is a battle between enemy forces in an attempt to complete a secret mission by taking over designated continents, forcing your opponent to retreat or indeed conquering the world. So no similarities with the mortgage market then.

Anyway, one of the FSA’s perceived highest risk areas in the current mortgage market is interest-only mortgages and the regulator seems determined to clampdown on this type of product. But to try and combat this we have seen various trade bodies bolster their respective defenses.

In response to the FSA consultation paper (CP) on interest-only mortgages, Robert Sinclair, director of AMI, said: “The regulator’s apparent aversion to a type of borrowing that has served many consumers very well appears predetermined rather than driven by rationale.”

The broker trade body’s support to the additional CML, BSA and IMLA’s submissions on the CP, suggest the industry has vociferously united against the FSA’s potential suppression of interest-only. So let battle commence.

But the question is what can advisers be doing in the meantime whilst these exchanges take place? The answer for the majority is the same as they have always done. However, with the spotlight squarely on this area it is advisable to be even more stringent than ever. Perceived high risk cases such as interest only certainly demand our full attention and robust processes must be firmly in place to ensure that advice on responsible repayment procedures has been imparted and documented.

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It’s fair to say that the vast majority of the intermediary market is fully aware of how interest-only has provided a large number of borrowers access to funding whilst serving in their best interests. Having said this it’s vital as advisers we ensure that the repayment plan remains justifiable and work to illustrate this.

In order to monitor such cases it’s prudent to implement a robust follow up system to revisit clients at the end of every benefit period. A mid-term review can also be implemented to make sure clients remain on track in terms of any planned over-payment activity or to evaluate the performance of any repayment vehicles that are in place.

Of course, as I’ve said, all this is nothing new and is something the vast majority of advisers have been implementing from day one. Nonetheless it doesn’t harm for any of us to double check that these procedures remain firmly in place.

Dominik Lipnicki, director at Your Mortgage Decisions