Registered brokers advising clients to take a secured loan can use Promise’s sourcing platform to receive a compliant pdf document covering full details of costs, underwriting considerations, declined lenders and a record of the application details.
Each time the loan details change the introducer is provided with an updated pdf which forms the basis of compliance records and is a valuable sales tool to show to clients.
Steve Walker, managing director at Promise, said: “Many advisers have historically believed that the exclusion of secured loans from Financial Services Authority regulation permits a much more relaxed approach to the sales process. However the real issue is about having an appropriate sales process in place irrespective of the product offered.
“Every adviser has a duty of care to their clients to make it clear what products they offer and that they carry out appropriate research on each product which leads to a documented recommendation or non-advised sale.
“This tool aids the sales process by clearly comparing preferred options against less favourable alternatives. Some networks also take responsibility for brokers’ advice on secured loans and this system is a must for them. With brokers’ advice under the eye of both claims companies and the regulator, we need to learn from the Payment Protection Insurance sector and ensure the sales process across FSA regulated and “unregulated” products are well documented.
“As case law evolves and precedents are set the interpretation of best practice will also change and those found lacking may lay themselves open to attack in the future.”
Walker added that the documentation his firm provides is an attempt to protect brokers from future criticism if a client complains that the secured loan was mis-sold.
He said: “Even if a secured loan is not the most suitable product, brokers are able to demonstrate why that is the case. The reports we provide will give brokers added credibility and help them to close the sale, whether it be a loan or a remortgage. Without these reports, brokers have little chance of proving they did a thorough job when faced with a Financial Ombudsman Service complaint.
“Given the sourcing system and that the reports are free to registered introducers, we see no reason why a mortgage broker wouldn’t use them every time when looking at capital raising options for their clients.”
Promise provides this as a free value added service to its introducers, whether or not a loan is ultimately offered.
