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‘Making things simple does not make them better, just easier to scam’ – Star Letter 13/09/19

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  • 13/09/2019
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‘Making things simple does not make them better, just easier to scam’ – Star Letter 13/09/19
Each week Mortgage Solutions and its sister title Specialist Lending Solutions selects the best contribution from readers as Star Letter.

 

The first contribution came from Arron190, in response to the article: Mortgage brokers using only a handful of lenders ‘on FCA’s radar’ – AMI.

He said firms should not pretend to offer a whole of market propositions or act independently for their customers’ best interests if there were only going to use three lenders. 

He added: “I have heard of firms who give most of their business to one lender and use statements on the suitability letters that simply say, ‘lender chosen due to speed of service’. Even with a purchase, very few cases ever need an offer in one week. 

“There are others than do not engage with business development managers (BDMs) and do very little with their continued professional development (CPD), so it’s easy to see why they are lacking diversity. 

“One might compare them to the middle-laners on motorways, who lack the confidence to change lanes, as they have failed to continue to develop their skills since passing and are ignorant of the traffic jams they cause.” 

Arron190 concluded: “Like medicine, mortgage brokering is a practice as it requires constant engagement to do it well and it is perhaps impossible to perfect. 

“Firms should be taking a serious look at any of their brokers with more than 20 per cent [of cases] going to one lender and ensuring price is the primary consideration and that there is good justification when the cheapest is not chosen.” 

 

Simplicity makes it easier to scam

Doug reacted to the article: Lloyds asks regulators if they understand execution-only makes lending riskier.

Doug said: “Execution-only was used by IFA’s to sell self invested personal pensions (SIPPs) not that long ago and then push funds into unregulated offshore developments and the likes of green oil.  

“That’s come back to bite them on the bum and most have closed because of payment protection insurance (PPI) type claims costing hundreds of thousands if not millions against the IFA or SIPP companies. Regulators never seem to learn from past errors.  

“Making things simple does not make them better, just easier to scam. The FCA always seems behind the curve and finds out about issues years after the event.

“Execution-only is an accident waiting to happen for target driven salespeople willing to push square pegs into round holes for commission or whatever they are calling it nowadays.” 

 

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