View more on these topics

Mortgage firms get a warning over outsourcing

Mortgage experts are concerned that many com-panies which have outsourced compliance believe that they will not be liable for any regulation breaches after M-Day.

Mortgageforce managing director Rob Clifford warns that far too many brokers who have outsourced their compliance to independent consultancies believe that if any breaches are found, the FSA will pursue the consultancy and not the firm.

Although a firm may have grounds for a civil action against a compliance firm if they believe they have been given bad advice, the firm itself is wholly responsible for ensuring that it meets compliance requirements.

There are around 4,000 firms looking to become authorised and Clifford estimates that as many as 2,000 of these firms have outsourced some of their compliance to independent consultancies.

Clifford says: “Firms have to realise that they are the regulated entity and they are responsible. You may have a civil case against a consultancy but pursuing this would be fraught with problems because of the nature of many contracts.”

Purely Mortgages chief executive Mark Chilton says: ” The primary responsibility is with the firm. It may have a compliance officer responsible for the day-to-day management of affairs but the directors are always liable.”



“Yes. For me it is worthwhile because it certainly can awaken me to a new product as I do not always get time to read through the papers.”Gillian Frodham,Gillian Frodham IFA “No. I have never used product descriptions by providers to give to clients as they would never read it.”Philip Harrison,Harrison Financial Services “Yes. We […]

MCCB calls for reasons-why letters to be retained

The Mortgage Code Compliance Board has identified key issues for the industry after the FSA takes over the regulation of mortgages. Its final annual report published last week, the MCCB recommends that in all non-advised sales, consumers should be given a warning of the consequences of not obtaining advice. It also stated that the title […]

Cheltenham & Gloucester – 7 Year Fixed Rate

Fixed term: Until November 30, 2011 Fixed rate: Up to 95% of valuation &#45 house purchase 5.74%, remortgages 5.99%, up to 90% of valuation -&#45 house purchase 5.49%, remortgages 5.74% Minimum loan: £25,000 Maximum loan: Up to 95% of valuation subject to no maximum Income multiples: Up to three times principal income plus second or […]

First State Investments – First State China Growth Fund

Type: Ucits Aim: Growth by investing in companies based in or which derive their income from the People&#39s Republic of China Minimum investment: Lump sum $1,500 Investment split: 44.3% industrials, 24.9% consumer discretionary, 8.7% financials, 5.8% energy, 5% healthcare, 3.5% consumer staples, 2.9% utilities, 2.1% materials, 1.4% information technology, 1.4% cash Place of registration: Dublin […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment