Compliance Consultants estimate that every IFA firm could be inadvertently laundering on average £1....
Compliance Consultants estimate that every IFA firm could be inadvertently laundering on average £1.5 million a year. Of the 56,000 disclosures of money laundering activity to the National Criminal Intelligence Service (NCIS) since September 2001, only 0.36% (just over 200) were reported by IFAs.
Marc Egerton, chairman of Complaince Consultants noted, at a SOFA half day forum on money laundering, that judging by the small number of disclosures made, "IFAs are not taking adequate measures to recognise and report suspicious activity".
Brian Lawless, managing director of SOFA, pointed out that criminals use IFAs to create smoke screens to disguise the true provenance of their money. "As advisers, it is the responsibility of all of us to ensure that we are as alert as possible to suspicious activity to help the NCIS catch more money launderers in the futute," he warns.
IFAs are reminded that since September 11, the FSA has introduced and revised a number of anti-money laundering rules that IFA firms must adhere to, including the mandatory appointment of a Money Laundering Reporting Officer who will be personally liable for any failure in the reporting system.
Mortgage brokers are also facing criticism, this time over their role in the inappropriate sale of self-certification mortgages.
Andy Frankish, a director at Mortgage Talk Direct, says the recent rise in house prices has resulted in some buyers being sold self-certification mortgages that are inappropriate to their needs.
"Although I genuinely believe that self-certification mortgages are a very useful product in the right circumstances, many borrowers see them as a way of obtaining a loan for a sum far greater than they would normally qualify for. While they are suitable in a number of cases, there are occasions where buyers will be tempted to over-commit themselves," he adds.
"A large degree of responsibility for selling these products lies with mortgage brokers themselves. Any decent broker should undertake an
affordability calculation, to pre-qualify applicants looking at these products. Even if the client cannot physically produce a wage slip or similar, some evidence of income should be requested before they are allowed to proceed," says Frankish.
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