Joanne Roberts, director of Need An Adviser.com, has seen many IFAs mistakenly fallen into a trap of believing that Initial Disclosure Documents (IDDs) are no longer mandatory since the Markets in Financial Instruments Directive (MiFID) came into force.
However this is not true, as Roberts explains: “The position is clear. Post MiFID rule changes cover Investments, Pensions and Insurance only - they do not cover mortgages.
"This means that every intermediary involved in the mortgage market must still issue an IDD. I suggest this includes virtually every IFA in the country.”
In addition, Roberts suggested that whilst the Menu, Investment and Insurance IDDs are no longer mandatory for investment and insurance business, supplying almost the same information to potential clients is still an FSA requirement under its revised disclosure rules.
“This means we still have to make virtually the same disclosures anyway, albeit in our own preferred format. IFAs may as well retain full IDDs with some post MiFID tweaks," she concluded.
