If your Network hasn't got a handle on Secured Loans - Are you at risk?
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We deal with a number of Networks and each one takes the view that going forward Secured Loans should be sold in a similar manner to a mortgage. This means suitability letters, research and using all the compliance tools we offer to properly document the sale. These Networks have a clear view of what is needed to protect their business and their A/R’s and our aim is to make this easy for them. The large Directly Authorised firms and IFA networks we deal with take a similar view.
However, If you are an A/R of a Network which is not on top of the changes in secured loan regulation you could be moving into an uncomfortable situation so I recommend you check the requirements and guidance of your Network.
Here is why – whilst your Network may take responsibility for your mortgage advice, when it comes to secured loans, many have previously pushed A/R’s down a referral route with little or no compliance oversight. If your Network is suggesting this referral process continues after 1st April I recommend you take a look at the contractual obligations to make sure your Network picks up the compliance responsibility for this process.
Previously your loan activity was outside the FCA. From April, to continue with Secured Loans, you will have a direct relationship with the FCA through your interim permissions. Therefore if you are encouraged to use a loan referral process which subsequently turns out to be flawed, you need to understand where the buck stops. You or the Network?
Some networks are addressing this by providing a sales process for ARs which largely mirrors the mortgage sales process. However many appear to have not yet grappled the subject. I strongly recommend you speak to your Network to satisfy yourself that you are not picking up the liability after April.
DAs - This might affect you too. Check your sales process