A cornerstone of FSA regulation is treating customers fairly. Lenders are becoming more reliant on the intermediary marketplace as the percentage of total gross lending through intermediaries increases.
The number of lenders that get 100% of their gross lending through this channel rises each year as new entrants see the broker market as a cost-effective means of mortgage distribution. The intermediary marketplace continues to be dominated by small or medium-sized firms, most of which have fewer than three sales people.
I have often suggested in this column that lenders have a vested interest in helping small firms comply and market themselves better. Giving credit where it is due, we have seen Mortgages PLC launch a marketing and financial promotions toolkit, Securah launch a series of compliance seminars and Platform help with TCF programmes. I have also suggested that the FSA gives something back to small firms by holding libraries of master documents on its website.
So I was delighted to see that the FSA has launched a range of TCF web pages aimed at small firms. It is important that all firms, including small ones, have TCF plans. The FSA expects all firms to have implemented TCF in a substantial part of their business by the end of March. This means firms should have identified the gaps and have taken action to fill them.
I recommend that any firm that has not thought in depth about TCF starts now. A good thing to do first would be to visit the new FSA web pages. These offer a wealth of information including examples of good practice, key messages and findings relevant to small firms and a useful central point for TCF information.
I’m sure everyone understands that many small firms are not in the habit of using business planning techniques such a gap analysis, but this is what the FSA expects all firms to do. In helpful mode, the FSA provides a TCF self-assessment gap analysis tool on the web pages.
Satisfying the March deadline is not the end of the TCF process. Firms should undertake a follow-up review at least annually or when there is a significant change in their business such as offering new products, taking on staff or working in new markets.
This year has started well for small firms with more assistance being made available. The question now is, will your firm make use of it?