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Brokers say KFI errors are hitting offset sales

Brokers are finding it increasingly difficult to sell offset mortgages and more complicated products because of difficulties with key features illustrations.

Mortgage intermediaries are reporting inaccuracies in flexible product KFIs, part-icularly those KFIs produced by sourcing systems, repeatedly finding errors in the additional features section of the document.

Brokers are finding it difficult to advise clients on split products, where they may be buying a fixed rate for one portion of the loan and a flex-ible rate for another because they cannot represent the composite cost of the transaction.

Overpayments, further advances and mortgage porting are also proving difficult for some brokers. Abbey withdrew its three flexible products just a few days ahead of M-Day as a precautionary measure, blaming IT problems.

Hill Martin broker Steve Smith says he is concerned that offset will never be a suitable product to be sold using just KFIs because of problems over showing where interest is being paid. He wants the FSA to allow brokers to produce a KFI for the entire loan taken out and include the information on where offset money is placed in the reasons why letter.

But Intelligent Finance, Standard Life Bank and Woolwich all say their systems are functioning well following pilot sessions and that they have had very few complaints.

London & Country broker Patrick Bunton says: “We have found it difficult to get the right KFIs from Standard Life. The reality is that flexible products offer extra bells and
whistles and this is where we are seeing errors.”


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Last week, I considered the fast approaching onset of depolarisation and the opportunity that this gives for advisers to reconsider the business model they operate – advice-based or transaction-based.


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