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FSA bans Essex mortgage broker

The FSA has banned Essex-based mortgage broker Antoinette Davis, trading as Ability Mortgage Solutions, for not being fit and proper to run a mortgage brokerage.

Davis set up Ability Mortgage Solutions as a sole trader after her previous employer was made bankrupt and continued servicing her previous employer’s client base.

The FSA says Davis failed to establish appropriate systems and controls and did not understand the standards the FSA requires of authorised persons.

She also failed to take reasonable care to ensure suitable advice was given and could not prove she was providing sound mortgage recommendations.

The FSA says Davis employed a compliance consultant but when it identified areas of serious concern, she failed to act on the recommendations promptly.

The regulator also found that Davis failed to ensure sufficient information was obtained from customers before recommending a product, opening up the possibility that customers were offered unsuitable advice or sold inappropriate mortgages.

Davis acknowledged that the letters sent to customers documenting why a mortgage recommendation was suitable were generic and not tailored to the specific needs of the individual.

FSA head of retail enforcement Tom Spender says: “Being an authorised person requires a responsible and competent approach. Davis lacked both of these qualities which is why we have banned her and cancelled her authorised status.

“By failing to put suitable systems and controls in place, such as effective compliance monitoring and staff training, Davis demonstrated a lack of competence and capability, proving that she is not fit to perform a role of significant influence at an authorised firm.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. At the end of the day, the FSA have a role in regulation, and to be fair I don’t know the ins and outs of this case, but as an ex directly authorised broker, and, haveing first hand experience of the FSA’s dictotorial attitude unless the FSA helps brokers and IFA’s and gives adequate instruction in exactly what they wan, then brokers will continue to lose their livelihoods. They need to get the reason the rules are beinjg flouted, if it’s not dishonesty then why is it continually happening?

  2. I think it is fair to say that ignoring the recommendations of a compliance consultant are not going to get you into the FSA’s good books of people they think are ok to be authorised!

    If she had acted on the recommendations the FSA would probably have taken this into consideration.

  3. Whoopedity dooo.

    One million and fifty thousand highstreet bank complaints sitting with the FSA and this is the type of problem they manage to sort and are proud to hold up!!

    There arent many high street banks so there must be a really big catch with them, worthy of news reporting,

    SO WHERE ARE THEY FSA???

    WHERE IS YOUR CONSUMER PROTECTION NOW?

    Nowhere because you do nothing as usual with the banks.

  4. What the cretins at the FSA forget to point out is that their “investigators” (who have no apparent financial services qualifications), presumably unsuccesful in gaining employment advising clients, failed to find any clients that wanted to complain or any that had actually complained (nor were they prepared to contact any clients directly for an opinion on advice and help given.

    The failings that were highlighted were all TCF related at the beginning of 2008 and could all have been rectified before TCF became final in december 2008. I suspect, or course I may be guilty of cynical, that as the scale of the FSA’s monumental foul up in the “supervision” of the lending institutions became apparent any small breaches of their “rulebook” were grasped like drowning men to attempt to justify their existance!

    I doubt that the “compliance failures” of Mrs Davis have resulted in the misery caused by the failure of the supposed regulators!

  5. I agree with the above comment and want to also say that with the FSA in the case reported, the adviser had to prove that she had made suitable mortgage advice. Is this a bit like saying that you are Guilty until proven Innocent!!
    Just another reason to leave this useless industry where the FSA is bribed or compromised by the Big Banks and all the effort is to hound the Independent broker!

  6. The FSA should stop bieng selective in directing their wrath to the IFA market. The service from the banck and the total lack of understanding by front end staff, refusing to log complaints, not even knowing the compliants procedure, continual breaches of data protection, does not even get a mention. I belive in regulation, but not just IFA selective regualtion, Name and shame the bank employees as well as the IFA offenders.

  7. Compliance Officer 30th November 2009 at 4:36 pm

    It would appear that some of the comments made here are people who also have something to hide. If not why get so angry about someone who is supposed to be a “Professional” who clearly did not do a professional job.
    Although TCF may not have been fully implemented when the “offences” were committed, surely all advisers should have been looking after their customers interests from the date they first gave advice if not they should never have been in the industry and the sooner they leave, either voluntarily or otherwise the better.

  8. AMAZING!

    Professional Brokers stating:

    It must be the regulators fault?

    Rubbish!

    Not guilty your honour!

    Get real.

    The FSA do not ban you for no reason!

    Whilst I do not care for them either they must have had just cause and reason!

    Still maybe one day the headline will say!

    Thousands of Brokers getting it right!

    Every day!

    We can still dream I suppose!

  9. I suspect this is not the full story (why do we never get a full picture which enables us to conclude whether the FSA have used excessive zeal or whether the rule shave been used wisely to police the industry?
    Nicole, you really should read the FSA decision http://www.fsa.gov.uk/pubs/final/ability.pdf
    BEFORE writing your article as many who have commenetd below have only commenetd based on your article and NOT the FSAs reasoning behind their decision.

    4.2.
    Prior to this date, you were a mortgage adviser employed by a small mortgage broker. When this broker was forced to cease trading because its proprietor (“Adviser B”) was made bankrupt, you agreed to act as a sole trader in order to continue servicing the previous broker’s client base. Adviser B was employed as a mortgage adviser by you.
    4.3.
    You were one of 50 mortgage brokers visited by the FSA in 2008 as part of a thematic project looking into the ‘quality of advice processes’ in mortgage brokers.
    Understanding the requirements and standards of the regulatory system
    4.5.
    You have explained that, when you became authorised as a sole trader, you did not have any understanding of the requirements imposed on an authorised firm. You have also acknowledged that you failed to take adequate steps to control the business for the first year after becoming a sole trader.
    Systems and Controls
    Compliance Resource
    4.6.
    You used the services of a compliance consultant. The arrangements with the compliance consultant were informal and on an ad hoc basis. The level of support provided by the compliance consultant varied depending on her commitments elsewhere. There was no formal contract in place and no document describing which services she was to provide to you.
    4.7.
    You have acknowledged that you need a full time compliance resource, however you have failed to appoint someone in a full time role.
    Monitoring of advisors
    4.8.
    You had no documented supervisory or monitoring system for advisers. You indicated that a compliance monitoring plan was installed, however you failed to provide any evidence of this plan.
    4.9.
    The monitoring of your advice and that of Adviser B is informal and inadequate.
    5.4.
    In an email to the FSA dated 18 August 2009, you indicated that you intended to close your business.

  10. I’m afraid the Antoinette Davis ‘fiasco’ is systemic of too many of the mortgage broker population ‘advising’ in the industry today. Lets hope the FSA introduce the approved person regime for all mortgage ‘advisors’ sooner rather than later.I have worked in the industry for a number of years in both an advisory capacity and over the last few years as a compliance officer so I am well positioned to understand the challenges facing both the regulator AND those providing advice.BUT LETS FACE IT WE ARE ALL SUPPOSED TO BE PROFESSIONAL PEOPLE…ITS ABOUT TIME THAT BROKERS FACED UP TO THEIR RESPONSIBILITIES…SOME CANNOT EVEN STRING TWO SENTENCES TOGETHER(I deduce this from the many ‘suitability letters’ I have had the unenviable task of reviewing over the years..believe me it’s frightening!!).
    The FSA should toughen up even further. Why not pay these ‘brokers’ a visit when they apply for authorisation;look at their systems and controls and only then grant part IVpermissions once they are satisfied that they have the necessary skills, knowledge and ETHICS to act appropriately. This could be followed up by a further visit 6/12 months later to ensure good practice continues.This would prevent accusations that the FSA have shut the stable door once the horse is 5 miles down the path!!
    The tone of this response may suggest I am ‘anti-broker’…I AM NOT (there are many excellent advisors in the industry) who are continually let down by the failings of some.

  11. As is always the case those who can do those who can’t become compliance officers. The FSA employ draconian tactics more applicable to a murder investigation, my understanding is that Mrs Davis was “summoned” to FSA headquarters (I now no where a large proportion of our fees go) where she was subjected to a 4 hour “interrogation by 3 FSA investigators who took it in turns to grill her and try to get her to say the wrong thing. Some of her answers were taken out of conext and in my opinion deliberately misinterpreted.

    The FSA job spec for an investigator actually stated that “no financial services experience is necessary” how on earth can these “investigators be in any way qualified to pass comment on the actions of somebody who had tried to rectify “apparent failures” in the previous owners systems and would I have no doubt have been up to speed in the required timeframe for TCF.

    Last point-how many sole traders have employed the services of a full time compliance officer or consultant? I suspect very few!

  12. It’s very difficult to help Mrs Davis AFTER the incident. This is why as the FSA appear to act almost as if they are our employer’s we need a Union or Alliance so that representation can take place.
    It would be good to hear the opinion of the compliance consultant who was assisting Mrs Davis. Do THEY consider the FSA’s response proportionate? Unfortunately I suspect we will never know as so many i the industry areso afraid of the FSA, they will not speak their mind for fear of persecuation. As they used to say in the Army when you got a dirty job “they can’t kill you and they can’t make you pregnant” (obviously things in the Army have chanegd a little since then) and it is time for more advisers and compliance consultants to respond robustly to the FSA and express their opinions WITHOUT fear or favour.
    The FSA’s website shows the FSA’s side of Mrs Davis story, come on Nicole, why not see if you can investigate the other side?

  13. Phil – really well pointed out. You should become a journalist!

    For all others who are remotely even considering blaming the FSA or taking Mrs. Davis’ side on this incident are typical of the junk in the mortgage industry.

    How anyone can expect to be approved if, in this day and age, they are not aware of being authorised is beyond me. Good to see so many unprofessional “fee-free” brokers (not advisers) go out of business in the last year. Good riddance. This will filter out all the rubbish and leave the professionals intact.

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