Speaking at Mortgage Business Expo, Alison Beeston, compliance and education manager at Bridgewater Equity Release revealed that the FSA is increasing its troops in preparation for an assault on 'incompetent' brokers.
The FSA is thought to be targeting brokers who do not have sufficient documentation in place to show that they are completing the necessary training. Supervision is also a vital part of this 'competence' assessment, following advice that "no activity should take place unsupervised."
Beeston drew on the example set by the FSA when it "took its first equity release scalp".
"There was nothing to say that the advice being given by the Minel Group was incorrect," she said. "Enforcement action was taken due to the simple fact that they had nothing written down to show that they were adhering to the correct procedures.
"If you cannot document that you are advising competently and log the measures you are taking to be fully compliant with regulation, then you leave yourself wide open."
Beeston urged brokers to accurately log their activity in documentation which they could produce on demand should the FSA come a-knocking, regardless of what sector of the market they advise in.
"Passing an exam does not necessarily make for a competent adviser," she continued. "Competence comes when you work at it - it's all about practice and learning as you go."
Indeed she said that the key thing going forward was that brokers are able to demonstrate that they know what they are doing, and urged brokers to introduce some form of competence statement into their day-to-day activities - similar to the way they would write a job description.
This will help streamline their affairs and protect their business should they receive a visit from the FSA.
