Our rules require you to assess whether the regulated mortgage contract is appropriate to the needs and circumstances of the customer (MCOB4.7A.6 R (9)). You must also consider whether it is appropriate for the customer to pay any fees or charges in relation to the mortgage contract up front rather than adding them to the sum advanced.
Each customer’s circumstance should be assessed on their own merits and your advice will depend purely on what is appropriate for that particular customer.
Q2: If I do not offer an execution-only sales channel and the customer does not want to go with the product I have recommended, or wants to change one part of it, can I proceed with the sale and get them to sign a suitability letter with the disclaimer stating that the change is their choice?
Where a customer has rejected your advice (in whole or part) and you have made a commercial decision to not undertake execution-only business then you do not have to proceed with the sale.
You can amend your advice, as long as the new product still meets their needs and circumstances. You are responsible for the whole recommendation, so getting them to sign a disclaimer will not absolve you of any responsibility (MCOB 4.7A.4G).
The 35/21 hour CPD requirement is for retail investment advisers only, it does not apply to mortgage sellers. The MMR does not affect this and does not introduce a minimum number of hours CPD for mortgage sellers.
However, we do expect firms to ensure mortgage sales staff are appropriately qualified and to regularly review their competence to ensure they remain competent for their role, as per the rule at TC 2.1.12.
It will depend on the nature of the change and whether it has an impact on the advice given. For example if the customer was advised to have a 25-year term but when the case is underwritten the decision is that they can only have a 20-year term, this may not meet the customer’s particular needs and circumstances and a further discussion will be needed to establish this.
It will be up to the firm to decide how to manage this. The underwriter may refer it back to the advisor for the advisor to discuss the change with the customer.
We are not prescriptive about how firms demonstrate that a client meets the known eligibility criteria of the lender.
Under the advised sale rules, you are only responsible for ensuring that a customer meets the known eligibility criteria of the lender. If the lender does not make this information available to you, we do not expect you to apply an alternative method.
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