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Regulation reminders

Film buffs out there will remember Hitchcock&#39s The Lady Vanishes. It has one of the most praised scenes in film history showing how quickly time passes. It reminds me a lot of the mortgage market at the moment.

To help finalise your preparations for regulation, it is useful to review the new business process. The AMI has just released its Guide to a Compliant Sales Process which sets out the key stages to address. This column does not allow me to discuss the whole process so let us look at the start.

•Sources of business. Have you reviewed your financial promotions? The FSA has set up a telephone line to report non-compliant adverts so it is definitely worth checking.

•Introducers. The responsibilities on firms which use introducers are worthy of a dozen articles in themselves.

•The FSA&#39s rules require firms to have sought the permission of existing clients for ongoing contact.

•New customers must opt in to ongoing contact. It is worth covering data protection issues too, so you can continue to receive information on clients&#39 mortgages.

•Every firm must have a compliant initial disclosure document in place and decide if it will use the combined IDD or separate ones for mortgages and protection. Remember, you can also issue of terms of business letters.

The FSA lays down requirements for firms giving advice in terms of how they come up with recommendations. These need to be set out in the key facts illustration and accompanying suitability letter. I know suitability letters are optional but, if it were me, I would do them. They can be used to reassure your PI insurer that you are a tightly run firm and may prove useful in the event of an ombudsman complaint.

Chris Cummings is a director of the Association of Intermediaries


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