Many advisers have dealt with their clients for many years, often they deal with the client, their extended family and their friends and the adviser’s business thrives on the referrals these clients bring. It is hugely frustrating therefore when a lender refuses to recognise this.
There is something fundamentally wrong in the fact that once the adviser has brought their client’s business to the lender, the lender treats the client as their own and will be reluctant to ever update the person who introduced them, often to the detriment of the client.
Under the initial MMR recommendations, if a client wanted to change the terms of their mortgage they would have had to receive advice, but final rules have dictated that they now don’t need to.
This can have major ramifications on the client, the level of advice they receive as well as affecting the question of who owns the client.
Under the final MMR rules at the end of a client’s two-year fixed rate for example, a lender can alter the product that the client is on, on an execution-only basis, without referring to the introducing adviser or offering the client advice.
This leaves the client completely unprotected; when an adviser offers advice then they stand by that and the client has a form of redress if they feel they have been misadvised.
If a client changes their mortgage under an execution only transaction then the lender takes no responsibility for them and the adviser can’t advise them as they won’t know about it.
This situation can’t be right either for the client of for the adviser who introduced them. In order for an adviser to continue to give high quality advice to their clients, it is essential that they know what other advice or information a client has been given.
Jon Round is chief executive at First Complete
