Consumer Duty
There is a lot of press in the industry about Consumer Duty and what this means to advisers. I can confirm that as the Network Principal, Connect is required to interpret the new standards and implement any requirements across the network. Network members are not required to consider what action is to be taken, as any changes needed will be decided by the network. So you do not need to worry and we will be communicating to our members any changes within plenty of time to meet the deadlines required.
I can confirm that the Connect Network Senior Management Team have approved the first draft of the network Consumer Duty implementation plan. We believe we are in a good place and already meeting many of the requirements, but some areas are under review for enhancement for the benefit of consumers. These include our vulnerable customer processes, protection sales processes and our policies and procedures documentation.
Over the coming months, we will communicate any changes to our processes that you need to be aware of and make available training and support so that we are fully prepared for when the Consumer Duty Rules come into force in July 2023.
In the meantime, the date for the implementation of PS22/11 ‘Improvements to the Appointed Representative Regime’ comes into force on the 8th of December and forms a part of the overall Consumer Duty requirements.
Improvements to the Appointed Representative Regime Paper
Our review of the paper has been completed and in the coming weeks, we will be implementing some changes to ensure the network meets all the new requirements ready for the start date of 8th December.
These changes include the following:
Contract
In the next couple of weeks, we will be issuing a new contract that will need to be electronically signed by the controller of each firm. This is to include new wording required by the FCA, which requires appointed representatives to cooperate fully with the FCA including granting access to premises. We are also required to add a paragraph that gives access to the network to as much information, without limitation, as necessary for us to comply with its own obligations to the regulator, including reporting and notification obligations.
At the same time, we will take the opportunity to complete some minor adjustments and amendments to the contract to improve clarity.
The updated contract will come from BOX and we will also advise you by email when it is issued.
Operations Manual
The operations manual is in the final stages of a full update and will be launched in BOX to correspond with the issue of the new contract.
This will ensure that you have easily available the most up-to-date supporting information you need to meet your obligations under the contract and to the FCA.
CPD
From 2023, we will be making it easier for you to do your CPD or record your external CPD in LMS, with quarterly rather than yearly updates. This will remove the pain of annual record reconciliation and demonstrate the consistency of your learning to the regulator.
15 hours is the minimum regulatory CPD requirement for advisers with protection permissions so this will be retained. 40 hours is the suggested target for mortgages, but we will be breaking this down by product permissions. This means advisers holding permissions from say just one product line, will have more appropriate and focused CPD minimum requirements.
Monitoring
We will be updating our application process and annual fit and proper process to meet the new requirements. This will include asking for additional supporting information such as bank statements, company accounts and business plans. In February will be required to provide full financial income data for all our appointed representatives both for the business they undertake at Connect and also for any other business transacted through the same entity, but not through Connect.
We will be looking to gather the data to meet this specific requirement in early January and the data required will cover the full calendar year from January 2022 to December 2022. We will provide more information in relation to what this looks like when the final requirements are published by the FCA on the 8th of December.
We have always taken pride in the bespoke offering we have for Network members, which we wish to try and maintain as far as possible. However, due to the new rules and increased scrutiny from the FCA, we may not be able to offer as much flexibility in our approach as we may have done in the past.
Whether you are looking to complete your annual fit and proper or take on new members of staff, we will look to provide as much support as possible to help you understand the new requirements.
If you have any further questions, please contact compliance@connectmortgages.co.uk