The Association of Mortgage Intermediaries (Ami) has launched a new factsheet for members dealing with retention business.
The factsheet has been designed to help Ami members deal with retention business and the issues surrounding regulated/unregulated contracts that may arise.
It covers compliance issues when reviewing existing mortgage arrangements and additional issues that will be raised where a client has an existing unregulated mortgage – taken out before 31st October 2004.
Rob Griffiths, associate director at Ami, says: “As a growing number of lenders offer increasingly competitive deals to existing customers, mortgage intermediaries may be recommending for their clients to stay with their existing lender more frequently. The factsheet is designed to help members and highlight some of the compliance issues that may be raised while dealing with retention business.
“The key point to remember is that if an intermediary is approached by a client with a view to reviewing existing mortgage arrangements, such a review is likely to fall into the definition of advising. This is regardless of whether or not the outcome of the review is a recommendation to move either product or lender.”
Griffiths says intermediaries must ensure they follow Financial Services Authority rules for these activities including an assessment of the suitability of the retention product comparing it with the rest of the mortgage products available within the firm’s scope of service.
The factsheet is available to all members from the Ami website.
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