He says: "Larger firms of course have the man hours and the structure in place to implement TCF, what a small firm has to do is make time, but once that step has been made it gets easier."
He says: "It's true that TCF is woolly but there are ways of working it into your business practice without having to sacrifice your business model."
Two years ago Lovey embarked on a TCF self-education programme. "There are things the FSA has done that I don't agree with, and believe me I fought against some of its decisions, however TCF in principle is a something I have embraced.
"I decided that TCF was here and was going to stay. My solution was to try and get inside the FSA's mindset."
Lovey said he had attended several FSA workshops and continues to check the FSA's website for updates, he reads all publications and updates published by the Association of Mortgage Intermediaries. He also uses websites like www.tcfinfo.co.uk: "My solution was to come up with a two page TCF charter, which I use as check list when dealing with a client." He regularly updates it.
Lovey's TCF charter includes basic common sense principles. "Because it is down in writing I can show it to the FSA as proof that I am treating my clients fairly."
"By signing over to a network I am not in control, that's not to say being in a network might not be suitable for other firms, but I know my business better than a network."
Even with TCF and proof of a TCF policy there is no guarantee smaller firms will implement it, he argues.
"I feel the FSA are gunning for the mortgage brokers who work alongside estate agents. If anything this is where malpractice is going to happen. I've heard anecdotal evidence of first time buyers being blackmailed, albeit subtly, to use the agent's solicitor and in-house mortgage broker."
Adopting TCF, Lovey argues, is also a process of self education. He argues the review is as much about the FSA trying to improve its communication with small firms, who make up 90 per cent of the companies it regulates, as it is about enforcing the TCF regime.
Some advisers appear to be following Mr Lovey's route. Phil Hall at the ifs School of Finance said take up of its Certificate in Regulated Customer Care, which was launched last year and includes a section on Treating Customers Fairly, had been proving as popular with mortgage advisers as IFAs. He said: "Some advisers are taking time to understand what TCF means, and a respected qualification will help them implement TCF strategies that will satisfy both regulatory and customer expectations."
Edward Boyle, practice manager at Affluent Financial Planning in Paisley Scotland is an IFA who sells a small amount of mortgage to existing clients. He predicts more advisers may seek network membership, but says he will not be doing so. He also argues the FSA does not have the resources to carry out the latest review.
"I can't see how the FSA is going to do this. We have been visited by the FSA regularly and the feeling we get is that regular visits are already resource heavy for them, it looks from this announcement that the regulator will have to increase the number of visits.
Boyle argues that far from simplifying things TCF simply adds another layer of regulation.
"There doesn't seem to be any rationale for this. Small firms haven't changed I don't see why there is a there is a need to supervise them any further. What has changed is that mortgage advisers are now regulated
and the advisers who need to up their game are quite often those who work in estate agents.
Boyle argues that TCF would not have been needed if the Mortgage Code Compliance board had not been wound up.
"It was a well run, slick organisation. We still run using the discipline implemented when we were signed up to the MCCB."
Like Lovey, Boyle feels advisers who are running their business well, have nothing to fear.
"I would guess they are looking at the much smaller advisers such as the mortgage adviser attached to agency, not those who have been regulated to sell financial services and products for some time."
IFAs have not changed and most apply the highest standards they can . Now we have to provide even more new documentary evidence and even then it is terribly unclear as to what the FSA really wants. I know how to treat my customers fairly but I'm not clear as to whether that is enough for the FSA and how do you prove a negative anyway."
Boyle says mortgage advisers have more than enough on their plates. "We are doing our six monthly report for the fSA at the moment and already causes us a lot of heart-ache, I'm the compliance officer. But we run a tight ship and we have to, TCF or not. My aim is to satisfy the client. Part of me feels the FSA is just playing to a crowd."
But Andy Frankish, director at Mortgage Talk, believes the FSA is upping its game when it comes to smaller firms. He argues that TCF has been part of regulation for some time and that the FSA will be gunning for smaller advisers.
"There is a real lack of knowledge of TCF, amongst other things, among smaller advisers. I don't think some of them realise how severe the implications are."
Frankish said smaller firms should seriously consider joining a network. "Sole adviser are finding it takes too much time and that could end up, ironically, eating into the time they can spend with clients. A lot do think it will never happen to them. We are a large firm and the support we get from our AR is absolutely invaluable, we would not be without it and it has helped us with our own personal TCF charter."
Frankish believes there may be a rush to join networks in the run up to December next year. "But by then it may be too late. Treating customers fairly is about the here and now."
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