CONSUMER DUTY NEWSLETTER

outstanding debts, amongst other things. However, it is important to note that the adviser should fully assess affordability and document this. Usually, a full income and expenditure (I&E) is the easiest way to do this as part of the Fact Find. The File Review team will check the I&E on the file against the bank statements and check that it all adds up. Asking questions such as: Does the income match? Are there any transactions that raise concerns? If there are figures that look unrealistic, we will flag this and look in further detail. For example, if a file that states the gas and electric will be £10 per month, the team will be asking what Provider they use as we would all want to use them! Alternatively, we will think the I&E has not been thoroughly completed, and will interrogate it further with the bank statements. Assessment of affordability is one of the biggest parts of a file. Going forward this will be one area you can document thoroughly to help show that the adviser has tried to avoid any forseeable harm to clients. If the Lender only asks for 1 months bank statements/payslips that is all you need to collect. False. The Lender may only ask for 1 month initially, however they expect the adviser to have more if requested. Additionally, bank statements and payslips are one of the best ways to spot a potential fraudulent application and to protect yourselves against mortgage fraud. The file review team look at bank statements for transactions that are not as expected or in line with the information in the fact find. If the fact find states the client clears their credit card every month, the reviewer will expect to see that transaction going through the account monthly. However, if when looking for it they see a payment to a credit company for the same round figure every month it will call into question if the debt is being repaid in full. We will also look at bank statements to see any deposits into an account, asking questions such as: How are the wages paid? Where has the deposit come from? Are there multiple deposits in a short period of time? Are there any unexpected transaction? Are there regular payments to betting companies (a potential sign of vulnerability)? I could go on… but bank statements and payslips are one of the crucial items we review, and one that an adviser should always review. This one thing alone can help you to protect your business going forward. There is no regulatory requirement for a suitability letter to be sent to a client. Correct! There is, however, an obligation to make sure the client fully understands what they have agreed to, and any potential downfalls and costs. An adviser can send lots of illustrations and applications and other documents to a client, but how will this show whether the client has fully understood what they were signing? 15 CONSUMER DUTY NEWSLETTER