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Are lenders doing enough to ensure their bdms operate within mcob rules?

Remaining vigilant and supporting the sales team with training should ensure BDMs stay on the straight and narrow, say our experts

Providing good quality information within MCOB parameters is down to good communication, consistent messages and continual feedback for those dealing directly with brokers. This is particularly important if a sales team is remote from the organisation’s operational base.

Intelligent Finance was one of the first lenders to offer offset mortgages. Education on this product was crucial and we recruited a sales team based throughout the UK to provide guidance on the offset concept to brokers in their areas.

This face-to-face experience with account managers and business development managers is supplemented by centrally produced communication materials. The team has taken CeMAP qualifications and this is supplemented by inhousetraining. Training programmes are regularly updated with the latest regulatory requirements.

Good quality training is a must. IF has a small and simple product range so we can dedicate a large part of our resources to ensuring our sales teams deliver quality guidance. One focus is building the skills that will help brokers identify the type of clients that can benefit from our products and appropriate sales techniques.

Regional managers observe and coach account managers and BDMs to ensure continuous improvement. We also regularly have seminars, either on a regional or national basis, to share best practice. We have various mechanisms in place to obtain feedback from brokers and are also able to monitor the cases placed by brokers. This highlights problems early on.

It’s difficult to know what other lenders are doing to ensure their staff operate within MCOB parameters but we believe the key is to support the sales team in terms of personal development, product knowledge and operational It would be naive of the mortgage industry to think its salespeople are not vulnerable to the temptation to bend the rules. Whenever the achievement of sales targets is a motivation, people can be tempted to find less than scrupulous ways to achieve the desired results.

This is why the Financial Services Authority recently said it intends to further investigate the selling of self-cert mortgages, particularly in relation to those in full-time employment. We need the industry to show it is squeaky clean after the embarrassing revelations of the BBC’s The Money Programme back in 2003.

The FSA’s Treating Customers Fairly regime is designed to ensure that among other things, senior management does not implement a business regime and ethos which encourages sales people to recommend inappropriate products. It’s easy to see how sales targets linked to financial incentives can lead salespeople astray and the FSA will inevitably be looking at such practices very closely.

This doesn’t mean targets and incentives are wrong – it means the way in which they are implemented needs to be sensitive and monitored closely. As the old saying goes, a bad officer blames his troops. If something is going wrong in the sales team, it’s senior management who must stand up and be counted. But we must be realistic and acknowledge that the temptation to bend the rules will be ever present, particularly over the next couple of years with the housing and mortgage markets in slowdown, meaning competition for new business will be tough.

Senior management must remain vigilant and if they see signs sales figures from one or two members of the team are rising suspiciously, find out why. You never know, it may not be bad news – you may need to buy the person concerned a bottle of bubbly for a job well done.


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