‘Show your working’
Nicola Firth is chief executive of Knowledge Bank
I don’t know about you but the three words at school that sent a shiver down my spine were ‘show your working’.
A maths test could be going pretty well and nearing completion with the majority of the answers arrived through luck, guesswork or divine inspiration but that simple phrase spoilt it all. Having to show your working exposed in a heartbeat those that had done their homework and those that hadn’t. There was simply no way around it. If you couldn’t explain how you got to an answer the fact that it was correct was of no importance.
Anyone seeing any similarities with mortgage advice yet?
We are all used to working in a regulated mortgage world and we’ve become accustomed to providing documents detailing the myriad product specifics of the chosen mortgage.
However, the evidence of how we’ve filtered down to that individual product is coming under more and more scrutiny. It’s pretty easy to explain why the mortgage we picked was the best of the ten options on offer but how did we whittle thousands of options down to a top ten?
Let’s face it, mortgage regulation is a maths not English exam. There are no points for artistic interpretation of the results, or the presentation of key information in the form of a haiku.
Great mortgage advice
is when brokers are aware
of how to haiku
The FCA demands ‘evidence of research’ and that is where the modern broker needs to, without fail, show their working.
To complicate matters thousands of product options from over a hundred lenders is of course only the start. Sitting beneath the headline rates is a layer of criteria conditions to get through before we even start. To do otherwise would be to madness, and akin to labouring for hours over a competition entry when you don’t qualify to enter in the first place.
So, how do you show your working?
Well the simple answer is to use a system to do it for you.
You would never spend a day in a library to find information that Google could have given you in seconds any more than you should have to trudge through countless lending manuals or spreadsheets to find which lenders will accept your client’s individual criteria.
At the last count our system held over 55,000 individual criteria so the scale of the issue is clear but so is the solution. Enter as many individual criteria considerations as you need to for you client and you will be returned those lenders that will accept them. Simple, but that’s only the half of it!
We may have got the right answer but remember that we have to ‘show our working’, and with mortgages this evidence becomes far more important as criteria is constantly changing. If all things remained equal and lending policy was set in stone then life would be oh so simple. But it isn’t!
Performing the same search just months, days or even hours later could return different results as criteria is constantly being updated. That is where evidence of research is so important.
At some future date the FCA may well ask to see evidence of your recommendation.
Having the results of your criteria search saved as a PDF and attached to the client file is the moment when you are very happy to ‘show your working’.