From Chris Bishop
I sympathise with John Helliwell (Mortgage Strategy October 20). The answer to his question is on the Financial Services Authority's website and I recommend that he studies it. This is not a course of action for the faint-hearted as the website will certainly never win any awards for plain English, although it makes excellent reading for any insomniacs among us.
I have made my own enquiries to various regulatory bodies as follows: I phoned the FSA, but it could not talk to me as my firm is an authorised representative through Sesame and therefore any questions should be directed through it. I phoned the General Insurance Standards Council with the same query, and it has yet to get back to me with an answer.
I then called the Mortgage Code Compliance Board, which was helpful and seemed to know exactly how the new regulatory requirements would affect my firm's current situation. From what I understand, and this is without prejudice, John's situation hinges on the term 'legal entity'. The FSA will not accept a sole proprietor, partnership, firm or company to be an appointed representative for one aspect of its business (for example, life business as part of a network), and apply to it for direct authorisation for another aspect of the same business (such as mortgages and general insurance) in the same name.
In John's case, he is an IFA with a firm of investment advisers and separately registered in his own name with the MCCB. If his mortgage business is conducted under a separate name (legal entity) to his life business, I think he will be able to apply for direct authorisation for mortgages. If he trades as John Helliwell and puts all his income in one bank account, I don't think the FSA will deem this to be acceptable. He will need to set up Helliwell Mortgage Services, for example, and keep the income separate for accounting purposes.
If anybody knows any different, can they let us know as we are having to make major business decisions based on our own interpretation of the rules.
Coastal Insurance and Mortgage Services