Verifying documents and judging a client’s reaction to information with non-verbal cues are just some of the things that have changed with advisers working from home.
So, this week Mortage Solutions is asking: How do you maintain compliance with rules and regulations in this new working environment?
Piers Mepsted, compliance and managing director at Financial Advice Centre
The Financial Conduct Authority (FCA) has been clear from the outset of the coronavirus pandemic that these circumstances will not be an excuse for relaxing compliance and regulatory requirements.
Our business has had to adapt quickly to ensure existing working practices and rigorous standards are maintained in the ‘new normal’.
With the benefit of hindsight, the technology which we had been investing in over the last couple of years has come into its own.
For instance, we’ve transitioned into working 100 per cent from home with relative ease using Wi-Fi handsets and virtual private network systems to enable online document sharing.
Internal and client meetings and conversations are now conducted over apps such as Microsoft Teams and other video conferencing facilities we have checked uphold data protection requirements.
Our existing internal compliance systems and controls are facilitated through the same technology.
The key challenges we have faced are with lenders struggling to keep up with demand given their reliance on wet signatures; posted application forms and certified copies of originals for client identification and verification of address.
This necessity to comply with the Data Protection Act and money laundering regulations is important – but we are still waiting for many lenders to incorporate the recommendations in the FCA’s recent Dear CEO letter of 31 March.
The technology is out there and shown to be working. Our industry cannot sit idly by and resist it.
With many institutions already using technology to verify identity and addresses – we must now embrace this opportunity to make our industry paperless, overcome the obstacles and fully embrace the opportunities this has shown us to move forward and evolve.
Martin Wade, director of Access Equity Release
For a company and an industry that predominantly specialised in face–to–face advice, moving entirely online seemed a big leap.
You often don’t know what can be achieved until given no alternative. When you are advising in a client’s home, it is easy to read their body language and facial expressions. You can tell if they understand or not.
Using a phone, even with video, those nuances become much harder to detect.
Our client services team are phone–based and have a wealth of knowledge and experience and they have been assisting our advisers to get tuned-in to a different way of advising.
Observed visits, compliance and paperwork has not caused any issues, all our advisers use an online phone system that has the ability to record calls, online video meetings can be recorded and we have re-engineered our whole process to be electronic.
Thus, we can still ‘observe’ calls to check quality and provide training, client meetings can be played back, and all the paperwork is in fact far simpler to process when sent electronically.
We have checks in place with our compliance team post the advice process, we have plenty of regular client contact and all is monitored and available and much of this process we will retain when we eventually get back to seeing people.
I am pleased with how we have all adapted so far but there really is no substitute for sitting down with a client face–to–face, that’s where we belong.
Jo Jingree, director of Mortgage Confidence
The main difference for Mortgage Confidence is that we are not seeing clients face–to–face.
Even if you carry out a video call with clients this is still classed as a distance sale as per FCA guidelines.
The key impact of this is we are not able to see original identification and proof of address documents to fulfil our anti-money laundering (AML) responsibilities. My network advises that we still obtain scanned copies of the documents plus carry out an electronic identity check.
Due diligence is the same whether you are speaking to clients by phone, video or face–to–face.
Asking the right questions, checking documents in detail, checking client understanding, ensuring fair treatment of the client throughout — these are the same whether face-to-face or not.
Utilising technology is a key way to fulfil compliance requirements. I use a client portal for safe and secure document sharing and messaging and use an online electronic identity service to validate the identity of the client.
Many lenders do not accept these electronic identity documents from advisers, but on the occasion a lender requires ID and proof of address most have relaxed their rules around certification in light of the coronavirus pandemic.
