A shameful piece of regulation

2

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  • payless
    payless Posts: 6,957 Forumite
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    It seems you are correct
     ;)

    yes sect 4.3.7 of that larger document covers the same point that I made.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • ;)

    yes sect 4.3.7 of that larger document covers the same point that I made.
    I never claimed to be infallible ! :)

    As I said, I mainly have worked on my clients post-sales area, so am not so au-fait about brokers WRT PS186 - but one thing PS186 is NOT is mortgage broker regualtion. Broker regulation is just a part of the whole set of rules.

    On the whole, I think the rules are very good - and will be beneficial to the consumer in a big way. Since the KFI must be perfect and describe the mortgage to within a pounds error the customer has good recourse if something does wrong.

    The only problem is that since the government wants all these tight rules in, someone has to pay for it... and it can't be the banks. In the end, the consumer has to pay and for my client, the programme so far has cost them about 60 million GBP - much of this will have to be recouped somehow. However, my client is not putting up its rates - which is exceptionally good of them.

    Also worth noting is that Abbey have withdrawn their flexible mortgage product and First Direct and Direct line have completely closed their book. You can easily tell who is prepared for this and who isn't.
    Titch :)

  • Nice to see an actual working IDD - personally don't like the tick box ( hence showing - unticked , the options that don't apply- could be confusing to some) but seems the way we must go

    You won't see a working IDD until Sunday - what you would have seen is a kind of de-regulated KFI (a KFI with section 1 removed, and some other FSA logos). The tick boxes are prescribed by the FSA but it looks like B&B have misinterpreted a tiny bit, you don't need to have an empty checkbox - an absence of one is better. We didn't like them much either - we are producing the KFI for customer using PDF documents and use a tick which is big, clear and does not look confusing at all. It can also be saved easier by the average customer. We've made sure it's very simple!
    Interesting to see list of lenders on the site you mention - long but a I see 1 really major player not included.
    Well, I don't know what backend the B&B use for sourcing those quotes, but if it's based upon Trigold or Mortgage Brain data then quite a few lenders have removed some feeds to them recently, just to be on the safe side in the run up to M-Day. Expect everything to explode into action on M-Day (besides poor old Abbey National who won't have their flagship flexible product ready) and then again on GI-Day in the New Year.
    Titch :)
  • payless
    payless Posts: 6,957 Forumite
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    I never claimed to be infallible ! :)

    none of us are
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • payless
    payless Posts: 6,957 Forumite
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    The tick boxes are prescribed by the FSA but it looks like B&B have misinterpreted a tiny bit,

    I agree absence of the "unticked" info would be cleaner - from what I have seen most brokers are using this method-
    I am still waiting confirmation from my outsourced compliance firm if I can get rid of unwanted info on my version.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • I agree absence of the "unticked" info would be cleaner - from what I have seen most brokers are using this method-
    I am still waiting confirmation from my outsourced compliance firm if I can get rid of unwanted info on my version.
    When in a PDF, it's quite obvious... but on a HTML IDD (which is not available online just now) having an unticket checkbox gives the customer the impression that they could change the advice level on the web site, which of course they can't.

    The FSA are (rightly) very strict as to the layout and wording of the IDD and KFI. There is very little room for changes.

    MCOB 4.4.1R(1) - Annex 1R - [PS186 Volume 2, pg. 98] clearly shows empty boxes where a tick should go. The reason for this, I expect, is that in a bank where a sale may be provided on an advised or a non-advised basis the seller will manually tick the appropriate box. I expect that this means in a HTML based IDD a box of some description will be required, and many people seem to have taken this as an unchecked checkbox - which I think is a bad idea. Just a plain old box woudl have done the trick. Oh well.
    Titch :)
  • dunstonh
    dunstonh Posts: 116,316 Forumite
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    Out of interest, does this now mean that mortgage brokers will have to be careful in future about how they answer questions on here regarding mortgages in the same way IFAs and tied advisors do regarding regulated products?

    ie, not being able to give recommendations or advice but "suggesting areas to investigate"
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • payless
    payless Posts: 6,957 Forumite
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    Don't some of us already do!
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • Out of interest, does this now mean that mortgage brokers will have to be careful in future about how they answer questions on here regarding mortgages in the same way IFAs and tied advisors do regarding regulated products?

    ie, not being able to give recommendations or advice but "suggesting areas to investigate"

    If they are giving advice in their official capacity, then yes.

    Imagine a broker speaking to their friend in the pub about mortgages - they would not need to give an IDD to their friend. It would be absurd - they are not operating with their broker hat on.

    But if they are, then yes - they would need to provide the customer an IDD on a durable medium. The customer must explicitly accept this (you can't say "click here" to agree with the document which is behind this like - which of course the customer never reads).

    It's a complicated matter - but in my opinion, a broker would be well advised not to offer advice on a specific mortgage to a customer on a bulliten board. It's a bit of a grey area.
    Titch :)
  • dunstonh
    dunstonh Posts: 116,316 Forumite
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    Imagine a broker speaking to their friend in the pub about mortgages - they would not need to give an IDD to their friend. It would be absurd - they are not operating with their broker hat on.  

    It doesnt work that way though for regulated financial products though.  That is why i wondered if mortgages were coming in line with regulated products.

    Technically, someone telling their friend down the pub to take out an investment bond, for example, would be breaking the law.   An financial advisor doing it, even if off duty, would be in breach too.

    Making posts on a newsgroup or bulletin board carries the same responsibility.  Generic information or discussions are fine but once you have to be careful not to cross the line (on the regulated side).    Using the "down the pub" scenario doesnt wash.   That was the view of the PIA and I assume the view hasnt changed when the FSA took over. Now that mortgages are under the FSA, I assumed that the same may apply.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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