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Keeping the regulator off your case

The Home Buyer System can protect networks and appointed representatives from falling foul of the FSA but can also be adapted for use by directly authorised brokers, says Frank Eve

I’ve recently reviewed a number of solutions that help brokers keep compliant records for the Financial Services Authority. This week I am looking at a system that can be used to protect networks and appointed representatives from falling foul of the FSA but can also be adapted for directly authorised brokers. It is called The Home Buyer System and has been developed over the past 10 years by owners Richard Angliss and Glyn Williams to follow the mortgage sales process from fact-find to completion and ensure it is undertaken in a compliant way. This should protect ARs and networks from regulatory problems.

The Home Buyer System contains an AR system and a compliance officer system. Every 30 days the AR system exports compliance data to the compliance officer system which keeps a record for each AR, including information such as employment history, examination passes, training history and competence testing. The compliance system performs a three-fold check on quality, quantity and risk.

Quality checking is largely automatic while the AR system highlights cases that have missing documentation. If the compliance officer system receives data from the AR’s system showing extra documentation is required it automatically responds highlighting the anomaly and requesting it to be corrected. The system will keep sending reminders until the AR takes action. If 21 days elapse and the AR has not acted the system will inform the compliance officer and they will be required to take action. The system will continue to monitor this until it is satisfactorily dealt with.

The compliance officer system allows cases to be checked for quality as it holds all the documentation. This provides checks that compare the information taken in the fact-find to the details in the Key Facts Illustration and then the product confirmation and suitability document. It’s useful that the system can undertake checks at any stage of the process as not all enquiries convert to sales. The compliance officer can check as many cases for an AR as is appropriate and can make comments and send them back to the AR.

It is important that all ARs and directly authorised brokers have foolproof systems to ensure all the required documentation is collected and stored for regulatory purposes. This system has been tailored to ensure the compliance manager has control of the process and the network has all documentation stored for reference.

There will come a time when the mortgage industry is subjected to retrospective inspection. This may happen if there is a downturn in property values and repossessions start to rise. The consumer lobby will want to look back over the records to see if borrowers can evade responsibility for negative equity problems. It may also happen as a result of a periodic regulatory review. When it does the legal and regulatory systems will put individual brokers under the microscope. The IFA market is all too aware of what this feels like.

That is when a system such as The Home Buyer System will really come into its own. This is the type of system all brokers need to ensure compliance and reduce the risks of giving advice in a regulated environment.

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