Mortgage brokers have been warned to keep client business records for at least six years in anticipation of consumer complaints or civil claims.
Speaking at the Preferred Mortgages seminar on regulatory options in London last week, Chris Cummings, director of AMI, Bill Warren, network director at Complete Mortgage and Loan Services and Philip Ryley, head of compliance at TLT Solicitors, highlighted the need for brokers to keep their records for a minimum of six years rather than the compulsory three years set out by the FSA.
Warren told the audience: “Brokers should retain records to safeguard themselves. Considering a civil claim can be made up to 15 years after the advice is given keeping records for six years should be the absolute minimum. In light of the self-cert scandal this cannot be emphasised too strongly.”
And Ryley added: “Brokers should understand that these records are not just a way to prove to the FSA that they are being compliant – they should keep them for their own purposes and peace of mind too.”
But some say any brokers who do not already maintain their records for this length of time are walking a precarious tightrope.
John Stewart, director of Essex-based PMI Independent Financial Advisers, says: “Brokers should keep their records for ever, never mind six years, especially with so many complaints about endowments. Ideally records should be scanned into a computer. It can be costly and time-consuming but it cuts the storage load. It's too dangerous to dispose of everything.”