The resolutions you should not have broken yet…
By Rob Lankey, CEO
Whether you’re one of those lucky members with an NACFB visit lined up, or whether you’re not, you should have in place a company structure chart; a compliance monitoring plan and compliance procedures; details of key business risks; a business plan; Treating Customers Fairly procedures, and anti-money laundering procedures.
Even if you’re only trading under Limited Permission, as opposed to Full Permission, the FCA requires that you do this. Even the smallest office has to imagine itself functioning like a bank, and to have the same safeguards in place against a variety of worst case scenarios. How could you go beyond these criteria – and why would you want to? Well, one way is to have Professional Indemnity Insurance, which isn’t (yet) an FCA requirement, but has always been an NACFB one.
Another way is to double up on your note-taking particularly when deciding which lender to approach. And a third way would be to lean harder on the NACFB templates that we have produced. The idea is that because our templates have been created by solicitors, checked by a second wave of solicitors, and then signed off by yet more solicitors, they’re probably a little bit more secure than documents you may have drawn up yourself, and the body that put them together will stand up for you if you use them.
Our Terms of Business is a good example of a treble-checked document, as it’s been subject to continual revisions to keep it up to date with the FCA’s clarifications. We offer it in two flavours, Regulated and Non-Regulated. The latter goes hand in hand with our Unregulated Members Policy, a document which we spent a long time putting together and which, paradoxically, we’d like to see used as little as possible because when a new member approaches us saying they plan never to touch regulated business, our first question is “why not?”
The recent changes to our industry have also meant revisiting our Code of Practice, a new version of which is now available in hard and soft copies. Neither of these documents made mention of the Financial Conduct Authority until recently, nor did they have very much to say on the intricacies of being an Appointed Representative (AR). Although the spirit, the underlying themes and values of the Code of Practice haven’t changed since the Association’s inception, the wording of our criteria and expectations was plainly in need of alterations, and so that was topic number one on the old 2015 to-do-list.
A lot of the new rules can be translated into simple English as follows: the consumer needs protection: from lack of clarity, from unreasonable costs, from a shortfall of knowledge about commercial finance per se. Members who have been unable to get FCA permission will not be allowed to:
- Accept business from individuals, sole traders, partnerships of 3 or fewer partners or an unincorporated body; because the FCA thinks they probably don’t know enough to understand what’s going on, and so you’re in loco parentis
- Act on behalf of nor advise an individual or partnership of up to 3 persons in relation to a debt due under a credit agreement or a consumer hire agreement
Both debt adjusting and debt counselling are considered regulated activities and join the list of things you must not do if you don’t have full permission.
It’s our aim to encourage brokers away from a situation where they find themselves unable to help clients, and that means we won’t want large numbers of unregulated brokers. We just need people to exceed, not simply meet, the regulatory criteria. So whether it’s January, February or July, the same New Year Resolutions apply.
What is My NACFB?
That is the name for our new Training & Education programme. Those of you who have been members for a few years will remember this is something we have offered in the past, but the new version is much improved and offers a whole lot of extra functions that the old Training Modules did not.
Proper feedback, recommended further reading, and a red-amber-green countdown graphic all helps you not just to pass the exams, but to learn relevant information and to prompt you if you need prompting. Competent Adviser, who have set up the system, have won awards for the depth of thought they put into the design. When we let it be known we were looking for a provider of new training modules, Competent Adviser won us over with the completeness, and the high levels of innovation, in their programme.
New website countdown
You might have noticed this has been further delayed. We’re now on schedule for a March launch.
A few last-minute changes are taking place to reflect the user experience reported back by our guinea-pigs, and most of those changes are to do with the online renewals process.