The FSA has made clear its intention to enforce regulations, especially in ever expanding areas such as the internet.
With the massive growth of the online mortgage market, it is safe to say that technology has had an astonishing impact on the industry, but how can brokers ensure that their website is abiding by the FSA’s rules?
Compliant or non-compliant…that is the question
The internet has proven to be a very powerful lead-generation tool for any broker, and yet it is surprising just how many still have no significant presence on the World Wide Web.
However, for those that have invested in a company website, it is important that they follow the rules.
Frank Thurlby, GHL Group compliance director, explained: “A lot of people develop their own websites, but the rules are very specific and it can be very easy to fall foul of these rules. Everyone can access a website, whether it is a consumer or competitor so it is vital that the regulations are followed.”
The main area the FSA is encouraging brokers to consider when making their website compliant is to adopt a ‘zero click’ approach to statutory risk warnings.
This, simply put, means that when a person visits the website, they should be able to see all of the relevant warnings in a single browser window – they should not have to click through to a second page, or even scroll down the initial page in order to see the warning.
However, here comes the first hurdle in making a website compliant, a website built to screen resolution of 1024x768, anyone viewing the site in a smaller resolution, such as 800x600, the user won’t be able to see the entire web page in their browser window and thus if the warning text is at the bottom of the page they will have to scroll down to view it.
The best way to overcome this problem and avoid a hefty fine from the FSA is, when designing the page, to place the warning at the top of the page as well as at the bottom.
Another issue that is unique to the internet is the use of banner advertising, either directing visitors to an external website or to another page within the initial site.
The problem here is that in directing users away from the initial page can mean losing the statutory risk warning that has to appear in order to comply with the FSA’s regulations.
Many websites, when directing users to an external site, display a message advising people that they are leaving the site and that they are not responsible for the content of another site.
Vernon Everitt, director of retail themes at the FSA, said: “Financial advertising has a massive influence on the decisions people make. So it must be clear, fair and not misleading, leaving people with a balanced picture of the key pros and cons.”
Which warning?
One particular area that was brought to light in the FSA review last year was that some websites were using the out-of-date risk warning, ‘your home is at risk…’
This in itself is a problem, but with print at least the advert has a ‘shelf life’. A website is permanent and accessible 24/7 so brokers must take the time to constantly review and update content, not only to keep it fresh, interesting and up-to-date, but also to ensure that it is compliant.
The desire for more information and a growing consumer confidence in online service propositions has led to an explosion of websites dedicated to financial products.
The FSA have therefore pointed out two main areas that brokers need to focus on when developing their online presence.
Firstly, the existing site must be thoroughly reviewed and up-dated in-line with the current FSA regulations and secondly, every page and link should be checked, checked and checked again by advisers.
Towards the end of last year, Loanoptions.co.uk launched their marketing toolbox, which contains a powerful set of tools including choices of compliant marketing material and ideas to promote loans to existing client bases as well as how to attract new prospects.
The website, which costs nothing to the intermediary, provides an online presence to promote secured loans, commercial mortgages and bridging finance. It can be either added to an existing site as a bolt-on, allowing the intermediary to offer additional services online, or if he doesn’t have a website, Loanoptions.co.uk can arrange a new site on his behalf.
Andy Moody, managing director of Loanoptions.co.uk, commented: “We supply introducers with compliant websites and in that they agree not to change anything, this is great because they can then just sit back and relax without having to worry about the regulations.”
