HLP Compliance Blog

Compliance Q & A, 15th September, 2016

This week’s question comes from Leanne Borthwick (LB), of Dartmoor Financial, who asked Gavin (GE):

WM: Can you make the Introducer Form less obstructive and more supportive for the business? At the moment it puts potential business prospects off from dealing with us.

GE: Hi Leanne. There is a lot of focus in the mortgage and protection industry on the subject of introducers as it seems there is an increase in both mortgage and protection/commission fraud that can be linked back to third party introducers. In fact, only in the last two weeks, we have had an investigation that found a third party was submitting client leads to a partner firm where (unknowingly to our partner) an accountant was providing the clients with good quality, but illegitimate supporting documents such as payslips. We managed to avoid a panel removal and a notification to the FCA for the partner firm, but the situation really highlighted the need to maintain a robust process for due diligence on introducers.

I have also, in recent years, investigated several instances where firms have had commission sharing arrangements for protection leads that have turned into a nightmare situation, with the introducer staging what appears to be legitimate leads and applications, only for them to turn out to be fake cases leading to significant amounts of claw-back and an introducer who then vanishes into thin air!

As painful as these situations can be, these are generally rare situations and I appreciate that there are many legitimate firms out there that want to provide genuine business leads in a controlled way. If possible we want to make their association with us as seamless as possible. What we need is a happy medium that will put off any one that would potentially do harm to our partners, but at the same time be straight forward for blue-chip, reputable and credible introducers. I shall therefore undertake to review the Introducer Application form to meet these objectives as well as for us to provide the form in an editable PDF format for electronic completion. Watch this space, Leanne!


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