AMI felt this was an issue that required clarification in terms of the regulatory requirements so we produced a factsheet entitled Dealing with retention business.A number of commentators have questioned whether the practice fits in with the Financial Services Authority’s Treating Customers Fairly initiative. The suggestion seems to be that lazy brokers – a term repeatedly used by those who denigrate our industry – will take the easy option. We are told that brokers will simply choose not to go through the full advice process. Instead they will recommend the existing lender because they know they will pick up a fee. Effectively they will choose to treat clients unfairly. AMI has much more faith in the professional practices of its members. We welcome the payment of fees to advisers who follow the full regulated advice process and end up recommending that a client stays with their lender. But our members must work for any payment they accept from a lender. An act of intermediation must take place. Applying for a retention product may mean less work for an adviser than arranging a remortgage with a new lender but when a firm is involved in arranging or advising on retention products it is still required to follow the FSA’s rules. This means conducting a full fact-find to establish a client’s needs, preferences, and affordability. It also means assessing the suitability of the retention product and comparing it with the rest of the products available within a firm’s scope of service – for example, whole-of-market or limited panel. Records must evidence that the scheme and the lender recommended meet suitability and affordability requirements. Our factsheet sets out the issues and outlines the responsibilities of intermediaries when dealing with retention business. It is available to members from www.a-m-i.org.uk/closed/cug/default.asp
- Top trends
MoneyExpert.com says one million people whose three-year fixed rate deals are due to expire will be moved to average standard APRs of over 6.5%.Average fixed-rate mortgages in 2003 had APRs of 4.22%, owing largely to a low Bank of England base rate of 3.5%. But as interest rates have increased, lenders have raised the APRs […]
Connells Group has appointed Roger Wilson to the newly created role of conveyancing services director. He will develop the conveyancing side of the business and also head the group’s activities in the Home Information Pack market.
Dear Delia Alan has owned a manufacturing company for 10 years. He has been trading profitably and requires larger premises. He wishes to buy rather than lease as he does at present.
The Mortgage Partnership has launched free valuations in association withGMAC-RFC. The packager is now providing brokers with free valuations and instant offers on selected packaged products from the Partners range.
December has left me destitute. My piggy bank lies broken and empty, my lunchtime meal deal feels like an extravagant expense and I’m down to the Bountys in my box of Celebrations. But I won’t mourn my dearly departed pennies. Between buying gifts for loved ones (then deciding to keep them for myself) to treating […]
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