IFAs often provide mortgage borrowers with reasons-why letters which fail to match the advice they gave, according to the Mortgage Code Compliance Board.
The regulator says borrowers are frequently left confused by letters from IFAs. It is also concerned about the pace at which reasons-why letters are dispatched, with IFAs regularly waiting until the mortgage is about to complete before sending the letter.
Although this does not contravene the mortgage code, the regulator is concerned that borrowers receive important information too late to change their decision.
The MCCB has issued a mortgage sales process guide urging IFAs to ensure the documentation they provide properly supports the advice they have given, and that reasons-why letters are sent immediately after a recommendation has been made.
The guide, available on the MCCB website, also asks IFAs to take into consideration borrowers' differing attitudes to risk when recommending a particular mortgage.
MCCB chief executive Luke March says: “As a result of our compliance work, we feel that this guide will be of particular value to small brokers lacking dedicated compliance facilities.”