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16 September 2015

Putting an adviser’s service disclosure document in front of a client in a durable medium, and pipeline business issues around the 21st March 2016 implementation date, are major areas to be covered by firms in the lead up to the Mortgage Credit Directive (MCD), said the FCA today.

Speaking at today’s Financial Services Expo (FSE) London in Old Billingsgate, Technical Mortgage Specialist at the FCA, Keith Hale, outlined a number of key areas which advisers would have to be fully aware of in order to continue trading compliantly.

First up was putting the service disclosure document in front of the client. “The Directive requires additional service disclosure and it has to be in a durable medium,” said Hale. He outlined how this could be a problem for those speaking to a client on the phone as the durable medium disclosure must be with the client before an adviser can move forward with any intermediation service.

“One way this could be done is to ask for the client’s email and send the disclosure document across while you are on the phone to them,” he said. “You must send the document before you move forward...if you can’t get it across to the client during the conversation, you have to stop that conversation.”

Hale also outlined another area where advisers will need to plan ahead particularly as the MCD will be implemented immediately on the 21st March next year with no overhang. Those cases which have not completed by the implementation date will have to be done under the new rules. “Advisers need to consider their pipeline because the Directive kicks in on the 21st March,” he said. “How long will it take to complete the deal? If it’s likely to be post-21/3 then it needs to be done under the new rules.”

Hale also suggested that the FCA would not consider a situation whereby a case had started pre-MCD but had to be rebroked and re-underwritten post-MCD a ‘good consumer outcome’.

FSE London is taking place today and tomorrow at Old Billingsgate in the heart of London’s Square Mile. Alongside the seminar sessions it will offer delegates access to a range of lenders, providers and distributors actively looking to build relationships with the adviser community. Over 70 exhibitors will appear including lenders such as Accord, Lloyds Banking Group, Halifax Intermediaries, Santander for Intermediaries, Skipton Building Society, Virgin Money, and many more.