Compliance Reminders – December 2021

We have recently seen a number of late or missing cases, and the number of compliance chases remaining post completion has increased. This cannot continue. Please take note of the below; our process hasn’t changed, but it seems some of you unfortunately need reminding again. We want to work with you and ensure you get it right first time, to save everyone time and ensure you get paid your commission as soon as possible!

As we are sure that most of you are aware, the FCA is ramping up its monitoring of mortgage intermediaries and their networks. They have stated explicitly that the reason for doing so is to weed out the poorly performing networks, who are not monitoring ARs sufficiently, and to close them down. This is ahead of a purge on directly authorised brokers – they believe that a high percentage of DAs are not offering compliant advice, and they therefore wish to move them into the far more monitored world of the network. Their aim is to ensure that any DAs are only moved to a Network where they will be closely monitored.

At Ingard, we are not overly concerned about the forthcoming review, we have always maintained that we keep the highest compliance standards and regulate our brokers in line with the FCA expectations. That said, there have been a number of breaches of protocol by brokers that have not been addressed sufficiently, and if the FCA were to inspect us today, we would be in breach of our own rules and procedures. These breaches largely centre on time limits given to amend cases. Unfortunately, “winding down for Christmas” or “being too busy” will not be a sufficient excuse for the FCA.

Remember, you have 7 days from submission of an application to get the full case to us on 360 for checking. This applies to Mortgage and Insurance sales. If you are unsure what constitutes an “application” or know there is going to be a delay, you must let us know so we can help you.

For each week a case is late, a 5% fine will be applied to the commission. This is well documented on all of our processes and your contracts, so you should not be surprised by any fines applied.

Process of Amending Documents/Providing Additional Documents

Please respond to requests to amend documents as soon as possible. This will increase the likelihood of passing at full review. You must respond within 7 days to Full File Reviews. Upload amended documents to the relevant Sale on 360 and add a note to explain what has been loaded. Make sure you save and then exit the case, so that once approved we can change tasks for what is outstanding. We are regularly being sent documents to check, which we can’t then action as the case is still locked. You should always respond to the person who has asked for the amendments, in either the Initial Compliance Check, Full File Review or Offer Check. This makes it much easier for us to check, as the person checking is familiar with the case and the requirements. If you’ve had a Full File Review before responding to the initial check, the full review supersedes this. If we have raised an issue with your sourcing, it is vital you re-run your research correctly straight away.

We suggest that you do not send documents out for signing (other than TOB and Fee Agreement) until after the Offer has been checked, in case of any further changes needed. It is therefore vital you upload Offers as soon as received, and again, let us know. As we are only asking you for signed documents at Offer or when Terms are accepted, there is no reason not to deal with your chases. Remember that you should only have an Insurance Disclaimer signed after the client has confirmed they do not want to discuss/take up quotes- not at the outset.

Chases are escalated to Management 2 weeks after Offer. Commission will only be “rolled over” once, and at this stage chases will be referred to Neil, and this will be noted on your 1-1. This means if we are unable to pay you on a case due to compliance issues by cut off, it will be forfeited if still uncompliant the next month. We have shown some leniency on this, but this will not continue in the new year. It is a risk to your business and the Network, looks unprofessional to clients, and wastes a lot of our time chasing. There is absolutely no reason for cases not to be compliant at this stage. If you are having issues getting signed documents back, please let us know, and we can help with this.

Reminders on Changes to Requirements Post Submission E.g., a change of property

If clients ask for changes post-submission of the Application e.g., a change to the loan amount, you do not need to amend your Fact Find (unless there is a full change of property). The information you recorded was correct at the time of the Application. However, it is vital that the client’s journey is being recorded from initial contact up to completion. It cannot seem as though the original requirements bear no resemblance to the mortgage the client ends up with. It’s therefore vital that you explain changes in your Suitability Letter where there is any change to advice or significant changes to the loan. You should explain why the changes have occurred, and make the client aware of any cheaper deals which may have become available. Of course, the client may prefer to continue with the same Lender, which is fine, but this must be detailed.

Change of Property  In the event of a change of property, you need to check how the Lender will deal with the change. If they need you to submit a new Application, then this would be a full new case, meaning a new Sale would be needed on 360. If they are able to amend the property on the existing Application reference, then you would need to add amended documents to the existing Sale and let us know. This would be the Property Change Form for the Lender, updated Research & KFI, and amended versions of the Fact Find, Affordability Assessment, Suitability Letter & Fee Agreement and BTL Addendum if applicable.

Case Updates

If you have an update on a case, it’s really helpful if you add a note to the Sale, to save duplication, particularly whilst Lenders and Solicitors have such long wait times. Some solicitors are refusing to give updates over the phone currently. If a Lender asks for additional documents, make sure you know exactly what they need, then upload the requirements via their preferred method as soon as possible, as well as adding to 360. Lenders will flag cases if they don’t receive what they’ve asked for, so if a case is no longer proceeding, you need to let them know rather than just ignoring the requests until they close it themselves.

If a case is not proceeding for any reason, please inform us ASAP and provide the Case Cancellation Sheet, clearly showing why the case isn’t going ahead and if it will be replaced. This will allow us to amend tasks so that we are not chasing Lenders/Solicitors unnecessarily or asking you for documents we no longer need. You still need to make the case compliant, but don’t need any signed documents. If a case is resurrected, it is vital you tell us so that we can re-open the case on the system, and let you know of any outstanding compliance. Don’t just add a note, as if we think the case isn’t proceeding, we wouldn’t go back into the case.

If you are struggling with your workload, or understanding the compliance required, please just pick up the phone or send us an email. We will work with you and explain in more detail, or come up with a plan to get you back up straight. We are happy to help, but don’t just ignore your chases!