Your November update from AMI Chief Executive Robert Sinclair

AMI Chief Executive Robert Sinclair gives his November update, including AMI’s Protection Viewpoint, market conditions and future challenges for advisers…

Making the most of AMI Protection Viewpoint findings

AMI’s 2023 Protection Viewpoint report ‘The Perception Gap’ is packed full of findings and insight aimed at mortgage intermediaries…

Consumer Duty – an update

Key Consumer Duty developments and recent communications issued by both AMI and the FCA, with commentary on implications for mortgage intermediary firms…

AR regime – updated AMI Q&A and deadline reminder

Having heard back from the FCA, we have updated AMI’s Q&A documenton the AR regime. We also wanted to remind firms of the upcoming 30 November 2023 deadline…

FCA application window open for firms approving promotions for unauthorised persons

Firms that approve financial promotions for unauthorised persons have until 6th February 2024 to apply for approver permission from the FCA…

FSCS levy and compensation figures update

The FSCS has released an update on its levy and compensation figures for 2023/24, as well as anticipated levy figures for 2024/25…

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Unregulated activities have gained interest over recent years as compensation scheme claims against intermediaries have risen dramatically, with most claims relating to advice given on an unregulated product. As the firms mis-selling these speculative property schemes and unregulated investments have been regulated, the burden falls onto the rest of the industry.

There is already an expectation that firms apply the same conduct standards to their unregulated business as their regulated activity. This will be reinforced with new code of conduct rules that will apply to all staff in respect of their activities, whether regulated or not, as part of the Senior Managers & Certification Regime. Furthermore, the regulator has proposed to extend its Principles for Business to unregulated markets. Aside from the need for clarification that this would only capture financial activity rather than related business lines (so that estate agency, surveying etc remains out of scope), I hope this is not the only measure taken in this area. It is unlikely to be able to capture the kind of fraudulent activity we have seen, as these firms have been short-lived and discreet in exiting the market. Instead it is early and sufficient enforcement action that needs to be taken, with better intelligence gathering, as well as greater scrutiny of individuals applying for re-authorisation.

The perception of what’s normal needs to be changed: claims should not be this high. They cannot continue at this level if the industry is to survive. It should not be a given that a firm’s entire client base will fall into the FSCS. Firms failing for financial reasons is a natural feature of the market. But to default without sufficient run-off PI cover and to also leave a raft of complaints points to a systemic problem within the firm, not only in its poor advice but also probable intent.

Aileen Lees
Senior Policy Adviser
February 2018


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