QUALITY OF ADVICE

Known in the industry as the Mortgage Roadmap, the Financial Services Authority (FSA) has been through a series of reviews into the relatively newly regulated mortgage sector. The reason for the Roadmap was an intention to bring about changes in firms' behaviour so that the Treating Customers Fairly (TCF) initiative was sufficiently embedded into every firm. The three top priority areas to focus on to support TCF were:

To ensure that firms are delivering fair outcomes to consumers

Improving the quality of advice

Debt and affordability.

One of the ways to evaluate the uptake was under the Quality of Advice project.
This project had two periods of intense activity, firstly in 2007 with a follow up in 2008. The second Review was carried out to determine whether firms had made improvements since the first Review and to see if the FSA's message was 'getting through'.
Around 250 firms were assessed, by telephone assessments, visits or mystery shopping, between January and March 2008 and looked at:

Management controls
Assessment of customer needs and affordability
Recommendations including product research
Communications with customers
Quality of advisers (training and competence)
Post sale.

These reviews identified four areas of concern:

Advisers' procedures and practices for assessing affordability
Customers use of self-certification of income
The procedures and practices used to ensure the training and competence of advisers
The effectiveness of senior management controls.

The Telos Compliance service can address all of these concerns. See our section on Self Certification Affordability Reviews and our SYSC section

Click here for more information on the FSA's Quality of Advice reviews