View more on these topics

Execution-only service is no excuse for bad advice

I am sure many advisers would agree with Gavin Hilton last week (Mortgage Strategy, Letters March 29) when he stated that banks’ service is not one of advice, but execution only.

But one of the examples quoted was where a bank mortgage adviser sold a two-year fixed rate when the client’s needs specifically necessitated a three-year deal.

Hilton goes on to say that banks, because of the pressure their staff are under, are never going to give clients advice that means they won’t do the deal.

I think we all agree that this is probably the case, but it is not an advised versus execution only sale issue – it is much more sinister than that.

Execution only is one thing, but bad advice and flouting the rules is quite another. Remember, regulated entities are obliged to whistleblow

In fact, the Mortgage Conduct of Business rules state in section 4.7.12 that “Where the scope of the advice provided is restricted the assessment of suitability should not be limited to the types of regulated mortgage contracts which the firm offers. MCOB prevents a firm recommending the ’least worst’ regulated mortgage contract where the firm does not have access to products appropriate to the customer’s needs and circumstances”.

Execution only is one thing, but downright bad advice and flouting the regulator’s rules is quite another. It should be remembered that regulated entities are obliged to whistleblow where evidence of such activity is discovered.

ANDY VALVONA
RELATIONSHIP MANAGER
CAPITA FINANCIAL SOFTWARE

Recommended

ED STUART-BROWN, HEAD OF PROTECTION SALES, FRIENDS PROVIDENT
1

Fit notes will open up IP opportunities

This month the government will circulate guidance on the issuing of ’fit notes’ to replace ’sick notes’. This is just one of several initiatives intended to help achieve the government’s target of reducing the number of incapacity claimants by a million by 2015. We have seen the impact of the Welfare Reform changes of 2008. […]

Reading out the figures he proved in detail that they had more oats and turnips than in Jones’ day.’ George Orwell Animal Farm

The month at a glance

A self-serving Budget speech was a disappointing climax to March, with chancellor Alistair Darling’s belated attempt to help first-time buyers coming at the end of a period that contained a mixed bag of news for lenders

What triggers the MPAA?

Jim Grant – Senior Product Insight & Technical Support Analyst There’s sometimes confusion around what triggers the money purchase annual allowance. Find out what does and what doesn’t trigger the MPAA. The money purchase annual allowance (MPAA) is a reduced annual allowance that can apply to contributions to defined contribution (DC) schemes. The following table […]

Newsletter

News and expert analysis straight to your inbox

Sign up