The role of the mortgage advisor (unit 3) Flashcards
True or false: Mortgage Advisors are always expected to give ethical advise.
True
The customers best interests should always be the most important aspect to any advise and recommendations given
Any recommendation
should be suitable for the customer’s needs.
What is the first stage of a mortgage advisor giving advise
A factfind
If a mortgage advisor finds two appropriate products for the customer to suit their needs and they end up recommending the more expensive product out of the two, what must they do?
The firm/advisor must explain why the more expensive mortgage has been
recommended
What does Principle 12 (the thing that caused the new consumer duty requirements to be introduced; ie firms must provide good outcomes) not apply to
Institutional investors, professional clients and eligible counterparties
(Principle 6/7 still apply to the above)
When presenting information about the recommended mortgage product, information should be presented in BLANK that the customer can easily understand, without unnecessary use of technical BLANK2
FILL THE BLANKS
Language
Jargon
Ben is advising a customer on a suitable mortgage to buy her next house. It is sufficient for Ben to provide the customer with a key features illustration. True or false?
False
Any new mortgage is an MCD regulated mortgage, so Ben must provide the customer with a European Standardised Information Sheet (ESIS)
From a regulatory perspective, ethical advice is best achieved:
through tight regulations.
by regulatory guidelines and good examples.
by allowing firms to set their own rules.
by regulatory guidelines and good examples.
It is almost impossible to impose ethical values through legislation and detailed rules. Instead, the regulator provides guidelines as to what constitutes ethical behaviour and promotes examples of good practice. While firms must take responsibility for their own behaviour, they should be advised as to what the regulator expects.
The FCA Consumer Duty:
replaces the 11 FCA Principles for Businesses.
establishes a new FCA Principle for Businesses – Principle 12.
comprises a detailed set of rules
establishes a new FCA Principle for Businesses – Principle 12.
The fair treatment of customers means that an adviser:
must recommend the most appropriate product from their range.
must always recommend the type of product the customer stated they require.
may recommend a product in which the customer has not expressed an interest
may recommend a product in which the customer has not expressed an interest
If the adviser does not have a suitable product within the range they offer, no recommendation should be made. In doing what is best for the client, the adviser may recommend a product entirely different from the one in which the client initially expressed an interest
What is the correct order for the advice process?
Factfind
Research (find the appropriate product from the info in the fact find)
Present
Implement
