The Role Of The Mortgage Advisor Flashcards
What are the three categories of service that a firm may offer to a customer when recommending a product?
Unlimited
Limited
Single lender
If no suitable product is available from the range available to the advisor, no recommendation should be offered.
For MCD regulated mortgage, the advisor must provide adequate explanations of the recommended product. In addition to providing the ESIS, what does this entail?
The key characteristics of the product
The effect the product would have on the customer
The scope of service
The fees payable and remuneration if the advice is given by an intermediary
Six fair treatment outcomes?
A) consumers should be confident of what?
B) products and services marketed and sold in the retail market must be designed to do what?
C) before, during and after the point of sale, consumers must be provided with what?
D) where consumers receive advice, what criteria must be met?
E) how must products perform? What can can consumers expect of associated service?
F) what must firms ensure once a sale has been completed?
A) consumers can be confident they are dealing with firms where the fair treatment of the customers is central to corporate culture.
B) products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
C) consumers are provided with clear information and are kept appropriately before, during and after the point of sale.
D) where consumers receive advice, the advice is suitable and takes account of their circumstances
E) consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
F) consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.
The primary requirement of the advice process is that:
A) the product recommended should be the best fit to the customer needs from the range available.
B) the amount of time the advisor invests in the customer should be reflected in the commission earned.
C) the customer should be sold the product they ask for.
D) the recommendation should be suitable for the customers needs
D) the recommendation should be suitable for the customers needs
If a mortgage advisor asks a customer about the age at which they expect to retire, this is most likely to be so that the advisor can:
A) ascertain if the type of property the customer is interested in buying is suitable for them
B) recommend an appropriate term for the mortgage
C) ensure that the customer can afford the repayments from their pension income
D) establish whether the customer is good at long term planning
B) recommend an appropriate term for the mortgage
Lenders are reluctant to lend to those who will not repay by retirement
Why might an advisor want to know about a customers future career plans or expectations of promotion, as well as current situation?
Information about future expectations of earnings might influence the type of product that the advisor would recommend
E.g. a low start mortgage might be suitable for a trainee in a job with a recognised career path and expectation of higher Sahara on qualification
What are the four key pieces of information that an advisor needs from their customer in order to provide a recommendation that meets the customers needs?
Needs
Circumstances
Objectives
Attitude to risk
In what section of the FCA handbook are the rules relating to fair treatment of customers set out?
There are no rules relating to fair treatment
Guidance is in The responsibilities of providers and distributors for the fair treatment of customers (RPPD) and in the six outcomes for customers
Which of the FCA principles for business most closely reflects the FCAs objective of securing fair treatment for customers?
Principle 6 - A firm must pay due regard to the interest of their customer and treat them fairly.
