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We must cut out some paperwork

Better ways must be found to gather and provide information under statutory regulation or we run the risk of drowning our clients in paperwork, says Sue Read

I attended an interesting event last week at which one of the speakers presented a variety of thought provoking research findings. She should get out more, I hear you mumbling. However, he said a large number of intermediaries feel clients are not getting better service or better advice after Mortgage Day than before. And I wholeheartedly agree.

Before Mortgage Day, clients got what I thought was excellent service from advisers. We completed a fact- find, established their situation and requirements and provided them with quotes. We went through all aspects of the mortgage product, repayment vehicle, underwriting procedures and legal process with them. We ensured that all their questions were answered in plain English and didn’t mind answering them repeatedly until they were happy.

Since M-Day, our clients continue to get excellent service and great advice. We complete a fact-find, establish their situation and requirements and provide them with an Initial Disclosure Document and Key Facts Illustration. We go through all aspects of the mortgage product, repayment vehicle, underwriting procedures and legal process with them. We ensure that all their questions are answered in plain English and don’t mind answering them repeatedly until they are happy.

In fact, the only measurable difference between the situation before and after Mortgage Day is the paperwork. The IDD is OK, if a little similar to the terms of business document that we always gave clients and still do. But the KFI is a nightmare and does not truly assist clients.

First, the KFI process takes way too long. We used to be able to provide quotes in a matter of minutes. We could print off a large number using the sourcing system, read through them and make our recommendations. With the advent of KFIs we made the decision – rightly or wrongly – to use a sourcing system to find the deals we’re interested in and only to obtain KFIs from the lenders. This has slowed down the process because of the tedious methods involved. I estimate that the time from enquiry to recommendation has increased from one or two days to at least a week. This is not good for our clients or our business.

Second, KFIs are inconsistent in length between lenders. I know this is being addressed but it remains complicated. I appreciate clients need to be given all the information about a product but we must be able to do this in a simpler format. I do not for one minute believe most clients read a KFI from beginning to end.

Coupled with the IDD and terms of business, and without even mentioning the interminable questionnaire, clients are beginning to realise that a visit to their IFA could take several hours and result in a serious stretch of rainforest being decimated.

We are in danger of drowning our clients in paperwork. Laudable sentiments lay behind regulation but common sense must prevail. We must come up with tidier ways of gathering information for our clients, and, more importantly, providing the information we need to give to them.


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