Firms ignoring FSA reference check requirements
Thomas Reeh, chief executive officer at blackandwhite.co.uk, has raised the issue after being forced to terminate the agencies of more than 30 advisers over the past 12 months who were not precise and thorough enough in their paperwork post-regulation.
Reeh said: “I know for a fact most of the advisers we have unloaded in the last 12–18 months are still active within the industry and that can’t be healthy. It’s alarming that these types of advisers can find a home within the industry without any reference checks ever reaching our doors. Clearly there are firms blatantly ignoring the FSA’s stringent requirement for reference checks, which are designed to rid the industry of sub-standard mortgage brokers. Perhaps, dare I say it, there are even intermediaries out there who may be fabricating references to beat the system.”
He added: “The FSA rules with regard to reference checking new mortgage advisers are very clear – you need to establish five years most recent and continuous employment history. Clearly, post-regulation, many firms like us have been increasingly vigilant about our reference-checking so we stay on the right side of the regulator and we have had to terminate the agencies of intermediaries who couldn’t provide the quality of paperwork we require. No doubt the FSA will jump on this issue when completing its visits, and for some it will be too late to duck for cover.”
Bill Warren, director of The Complete Network, said: “Regulated firms should have a system built into their recruitment processes so that reference check facilities are in line with FSA regulation. Guidelines set out by the regulator are clear and as well as being poor business practice, it is clearly against the rules.”