Compliance 'shouldn't be a scary word’ for mortgage advisers

by Ksenia Stepanova15 Mar 2019

With the implementation of FSLAB imminent and new disclosure requirements kicking in, mortgage advisers will have more work on their hands than ever to ensure they can continue to run their business smoothly.

Demonstrating to regulators that your brokerage is complying with new standards will take administrative manpower that many independent practitioners do not have, and according to Ryan Edwards of The Adviser Platform (TAP), this will likely be the most significant challenge faced by smaller adviser groups.

“It finally looks like this legislation is going to pass very soon, which is quite exciting and will bring all the industry chat to the forefront,” Edwards told Insurance Business.

“Advisers will need to start making plans around how they’re going to operate within the new environment, but there’s obviously going to be quite a bit of emphasis on documentation, processes and systems. That will be a small challenge to some advisers, but a more significant task for others.”

“The new disclosure requirements will be a bit of a moving target,” he explained. “There’s a fairly heavy disclosure regime for advisers now, especially for AFAs, and it’s a very important part of the piece – but it’s got to be done in a way that the clients can actually get some benefit from it. This whole regime will move more into a conduct-based context rather than a prescribed set of boxes to be ticked and forms to be filled out, and it’s not unreasonable for advisers to be explaining to clients how the world works, and what a client can expect from an adviser.”

TAP recently hired a new Head of Compliance and Advice, Scott Duncan, who has almost ten years of experience in financial services and compliance. He will work with advisers to help simplify the process for them, and to “make it as simple and straightforward as possible.”

“Compliance shouldn’t be a scary word for an adviser,” Edwards said. “We’re really keen to work with them to ensure they have the right framework in place and provide the staffing and the systems, so they can demonstrate that their processes are all being followed.”

“It’s one thing to have a process, but the challenge is then demonstrating to a regulator or auditor that this process is being consistently followed. That’ll be the challenge most advisers will face.”

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