AFB director Robert Sinclair welcomed the findings from the website poll, but warned that in light of recent ombudsman decisions brokers must work hard to ensure the relationship is in the best interest of consumers. They must also fully understand the implications of this relationship and accept responsibility to develop it. The AFB is also calling for a 12 month period where a lender cannot ‘market’ the client to allow the broker to forge a relationship.
Sinclair said: “The issue of who owns the customer is at the heart of many regulatory revisions and ombudsman decisions. Brokers should take care to ensure they understand these issues fully as they go wider than purely regulatory requirements and are based in law.
“Roles, responsibilities and limitations should be set out in the agency agreement between brokers and lenders. We would encourage all brokers to ensure that they read such documents carefully and not agree to conditions that have a potential negative impact on relationships with their clients.”
Recent publicity surrounding alleged ‘client snatching’ where a lender makes a decision to increase the amount of a loan following a discussion with a customer or changes the advice surrounding the purchase of PPI, has increased focus on the issue of who is responsible for the customer relationship.
Sinclair added: “Any decision to vary a broker’s recommendation will need to be very carefully documented. Where a lender is amending the advice of the broker, who is the agent of the customer, then they would have to be able to evidence that either circumstances have changed or that their new recommendation is better than the original advice. They will also have to be able to justify why they have conducted that process and not referred back to the agent of the customer (the broker) in making such an alteration. It will be difficult to justify this action in most circumstances.
“Similarly we encourage all brokers and lenders to agree a period where the lender cannot ‘market’ the client, for say 12 months, to allow the broker to forge a relationship. The broker must accept responsibility to develop that relationship via face to face meetings, telephone calls and other communications.”
