Advising and Selling Policy | Statement and Purpose | Mortgage and Home Finance Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

6.10.1 Advising & Selling Policy

1. Policy Statement

The company are committed to ensuring that acts of advising and selling in relation to the services and products that we offer as a: –

[DELETE/ADD]

• Mortgage Lender
• Mortgage Adviser
• Mortgage Arranger
• Home Purchase Provider
• Home Purchase Adviser
• Home Purchase Arranger
• Equity Release Provider
• Equity Release Adviser
• Equity Release Arranger
• SRB Adviser
• SRB Arranger
• SRB Agreement Provider

Are fair, appropriate and suitable for the customer. Our aim and intent is to remain compliant and in alignment with Principle 6 (Customers’ interests), Principle 7 (Communications with clients) and Principle 9 (Customers: relationships of trust) of the FCA’s Principles for Business and to ensure that all staff are aware of our obligations, objectives and commitments with regards to selling and advising.

To comply with the MCOB Sourcebook and where applicable, the MCD, the company have developed and set the objectives to be met with regards to initial disclosures, range of products and the basis of remuneration. This policy has also been created to provide guidance and support for our staff, to ensure that they protect a customer’s interests at all times by adhering to company and regulatory requirements, procedures and objectives.

2. Purpose

The purpose of this policy is to provide clear guidance to our staff and to honour our duty of care obligations to customers with regards to the advising and selling of any mortgage or home finance products. This policy sets out our objectives and details how we intend to be compliant with MCOB 4 of the FCA handbook.

The company provides staff training on the objectives and aims set out in this policy as well as the FCA requirements on selling and advising, along with any other associated regulations, with the aim of ensuring that our staff understand their obligations and comply with any and all rules prior to offering advice or selling a service or products to a consumer.

We are committed to providing all customers with a high level of service whilst remaining compliant with the legal, statutory and regulatory requirements.

3. Scope

The policy relates to all staff (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas) within the organisation and has been created to ensure that staff deal with the area that this policy relates to in accordance with legal, regulatory, contractual and business expectations and requirements.

4. Objectives

The company has laid out the below objectives and aims which we intend to meet in relation to the MCOB requirements for selling and advising.

[NOTE: If you have your own set of objectives, please either replace or add to the below list. You should also add a section to this policy template with your systems, controls and measures for ensuring that they objectives and requirements are met.]

The company will ensure that: –

• Customers are adequately informed about the range of home finance transactions available from us and other firms and the basis of any associated remuneration
• Where advice is given, it will always be suitable for the customer
• Whenever we make a sale during which there is spoken or other interactive dialogue between us and the customer (with exceptions for high net worth mortgage customers and professional customers, and for loans which are solely for a business purpose); we will always provide advice to the customer
• When there is no spoken or other interactive dialogue between us and the customer during the sale, we may on occasion provide an execution-only service (with the exception of certain vulnerable customers who are given advice in every case)
• Execution-only sales are only provided where the customer has been warned about the implications of proceeding without advice, or where the customer has rejected advice which has been given, and has specifically instructed us that they wish to do so
• Except in the case of regulated sale and rent back transactions, customers will always have the right to reject advice and proceed on an execution-only basis

5. Initial Disclosure Requirements

In accordance with the requirements under MCOB 4, and using the methods and at the times specified therein, the company always provides the customer with the following information: –

• Whether there are any limitations in the range of products that we will offer to the customer, and if so, what those are
• The basis on which the company will be remunerated, including:
  • any fees that we will charge to the customer
  • when any such fees will be payable and, if applicable, reimbursable
  • whether we will receive commission from the mortgage lender or another third party and, if applicable, whether any commission will be offset against any fees charged and the arrangements for doing so
  • for an MCD regulated mortgage contract, the amount of commissions or other inducements, or where the amount is not known at the time of disclosure, notification that the actual amount will be disclosed at a later stage in the ESIS.
  • all details pertaining to the above, must be expressed where possible, as a specific cash sum (refer to MCOB 4.4A.8.2 where this is not possible)
• The availability of alternative finance options
• Where a customer is looking to increase the borrowing secured on a property which is the subject of an existing regulated mortgage contract, we will always first inform the customer, either orally or in writing, that the following alternative finance options may be available and more appropriate for the customer:
  • a further advance from the existing lender, unless we know that the existing lender will not make a further advance to the customer
  • a second charge regulated mortgage contract, where we would offer services in relation to a new first charge regulated mortgage contract
  • a new first charge regulated mortgage contract, where we would offer services in relation to a second charge regulated mortgage contract
  • unsecured lending
• Such information will be provided clearly and prominently and in a durable medium (paper or any instrument which enables the recipient to store information addressed personally to him in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows the unchanged reproduction of the information stored)
• Where the initial contact includes spoken interaction, the information will always be communicated orally
• Where the initial contact is made by electronic means, we ensure that the customer cannot progress to the next stage of the sale unless the information has been communicated to the customer
• In the instances of an internet sale, we have specific website text that displays the required information on a screen which the customer must access as part of the sales process. This is done in the form of a tick box to enable the customer to proceed to the next stage – so reading and acceptance is a mandatory requirement
• Where a postal sale takes place, we ensure that all required disclosure information is set out clearly in our covering letter
• Where the initial contact is by email, SMS or instant messaging, the information is always clearly and prominently displayed at the top of the message section
• For face-to-face and telephone contact, we use prompt scripts which detail the disclosure information that staff must relay to the customer during the course of their contact. This information is then built into the initial oral discussion with the customer in all cases
• Where the initial contact is by telephone, we also ensure via script prompts, that staff give the full name of our firm and the commercial purpose of the call prior to proceeding with the call content

6. Distance Contract

Where we provide any service to a consumer by way of a distance contract, we always ensure that we provide the consumer with the following information in a durable medium in good time before the distance contract has been agreed: –

• All of the information set out in the above Initial Disclosure clause (as per MCOB 4.4A.1 R to MCOB 4.4A.8A R)
• Whether or not we will be providing the consumer with advice
• Our full name and the main business that we conduct along with the geographical address at which we are established and any other geographical address relevant for the consumer’s relations with us
• An appropriate statutory status disclosure statement, a statement that we are on the Consumer Credit or Financial Services Register and its FCA registration number
• The total price to be paid by the consumer to us for the financial service, including all related fees, charges and expenses, and all taxes paid through us or, when an exact price cannot be indicated, the basis for the calculation of the price enabling the consumer to verify it
• The arrangements for payment and for performance
• How to complain to us, whether complaints may subsequently be referred to the Financial Ombudsman Service and, if so, the methods for having access to it, together with equivalent information about any other applicable named complaints scheme
• Whether compensation may be available from the compensation scheme, or any other named compensation scheme, if we are unable to meet our liabilities, and information about any other applicable named compensation scheme
• Any other contractual terms and conditions of the distance contract

7. Monitoring Compliance

In addition to our standard Audit and Compliance Monitoring Procedures and Quality Assurance Procedures, we ensure that staff and the firm itself complies with the MCOB 4.4 disclosure requirements through the below controls, measures and actions: –

• Scripts with the disclosure details written down for face to face and telephone sales/advice
• SMS and Email have the written disclosure requirements embedded into the top of the message content and all outgoing messages are reviewed for compliance during our routine monitoring schedules
• Live and recorded sales and advice telephone calls are audited using compliance procedures and scripts for adherence to the MCOB 4.4 disclosure rules
• Ongoing training on the disclosure requirements and exact wording is provided to all staff and assessments are used to ensure knowledge and understanding in this area
• This compliance manual is made available to all staff as a means of and information resource, support and training aid
• Prompts and screen pop-ups are used during contactless sales, such as the internet and via the website, to ensure that the disclosure information has been read and seen – this also requires a tick box option that the customer must interact with in order to proceed to the next stage
• Procedures are in place for all disclosure requirements which enable us to monitor and audit the staff’s compliance against standardised and tested procedures

8. Responsibilities

The company will ensure that all staff are provided with the time, training and support to learn, understand and implement the Advising and Selling Policy and associated procedures. Management are responsible for a top down approach and in ensuring that all staff are included and have the support needed to meet the regulatory requirements in this area.