You are here: Home - Better Business - Business Skills -

Protect the future with a back to basics advice approach – Stonebridge

by: Richard Adams, managing director, Stonebridge Group
  • 24/10/2016
  • 0
Protect the future with a back to basics advice approach – Stonebridge
The end of this month marks the 12-year anniversary of ‘Mortgage Day’ – remember that? For those of us who have been active in the market since 31 October 2004, it seems odd that we’ve notched up a dozen years of statutory regulation.

At the same time it seems like a lot (and I mean a lot) of water has gone under the bridge, and yet I recall the handover from the Mortgage Code Compliance Board (MCCB) to the then FSA as if the 12 years in-between have gone by in a flash.

The anniversary of Mortgage Day was brought to my mind recently reading a Mortgage Solutions article entitled: Three things the FCA thinks advisers should be looking at.

To my mind, the three considerations outlined seemed like very basic, almost commonsense, being based on customer engagement, customer information and written confirmation. Broken down, they essentially mean: put yourself in your customer’s shoes; make sure your client files are clear and clearly understandable to those external to the business; and make sure all written client communication is ‘clear, fair and not misleading’.

Now, part of me immediately thought, ‘Well if advisers are not doing that, what are they doing?’ Because these seem like some of the basic tenets of mortgage advice, certainly since Mortgage Day was introduced and, actually when you consider it, would have been just as important prior to statutory regulation. But, if the FCA is seeing cases where advisers are not following these basics, then it is well within its rights to call the industry out on it, and to wonder why these three fundamentals are not being adhered to.

We work within a very complicated marketplace and I’ll be the first to admit that the complications can often muddy the waters in terms of the service advisers deliver. For those who’ve been involved in advice for many years, the temptation could be that we are using that experience to second guess what our clients want, the nature of the evidence we provide to back up our advice and recommendations, and to simply assume the documentary evidence we supply is as clear to customers as it is to us.

Effectively, these points made by the FCA are a welcome reminder that we cannot do this. If we do get a complaint, in which our advice, motives and delivery are unclear from the paperwork we deliver, it’s not going to be good enough to simply say, “Yes it’s not written down, but I told the client and it was obvious from the advice the reason for my recommendation.”

If it’s not obvious to the client, it’s probably not going to be obvious to the FCA, and certainly not obvious to the Ombudsman – and we all know how that is going to end up.

So, while it might seem to be the equivalent of teaching your grandmother to suck eggs, I’m all for going back over the fundamentals of advice with advisers. It may well have been 12 years since Mortgage Day but those basics are equally relevant today and should essentially be the foundations on which your advice is provided, and your firm trades. Revisiting them is no bad thing and should provide a timely reminder to all concerned exactly what is expected.

There are 0 Comment(s)

You may also be interested in