Don’t get your IDDs in a twist!
The Association of Mortgage Intermediaries (AMI) is calling on all member firms to focus on their record keeping and disclosure documentation. AMI has today issued a warning to members to keep strict records of not only the type of IDD issued but also to date stamp each IDD so they can properly archive it.
To help with this aim, AMI is producing a 10-point guide to safe record keeping, which is free to AMI members and can be downloaded from the AMI website: www.a-m-i.org.uk.
Commenting on AMI’s rally call, Chris Cummings, Director of AMI, said: “Regulation is fast changing our market. An intermediary’s understanding of what the FSA is looking for today will move as the regulator issues further clarifications and even changes the rules. Added to this, the Initial Disclosure Document must set out what the business is and what it does. As our industry changes, these descriptions will change too.
“While there is no doubt that an intermediary’s IDD will be correct when it is handed over, if a complaint arises later, an Ombudsman will want to see a copy of it. As complaints can arise years after the initial meeting, unless firms have recorded the type of IDD issued, they could run into problems that risk undermining their defence against the complaint.”
Cummings continued: “This may sound like bureaucracy for the sake of it, but consider the situation today, at the start of the new regime. Firms can have: a mortgage only IDD, a protection only IDD, a combined IDD, an IDD which sets out that they only offer advice on some mortgage protection needs, or an IDD which shows that they consider all protection needs. Then there are separate IDDs for Lifetime Mortgage products. Added to this is the fact the some firms offer non-advised sales, and it’s easy to see why record keeping becomes a necessity.”
While General Insurance regulation has extended the compliance burden for firms, Cummings also adds that intermediaries should consider the way they advise on protection policies for possible opportunities.
“The protection market still offers a good revenue stream for mortgage intermediaries. In a market which appears to be cooling, firms should think twice before walking away from profitable business. With a little attention the protection market is still a good one for mortgage intermediaries to be in,” concludes Cummings.