Worst-case scenarios
What happens if a broker does get caught up in a fraudulent case or a lender contacts the broker with an issue? Clearly, there has to be an investigation to understand why it happened, and how to stop it from happening again.
The worst case of course is a complaint to the Financial Ombudsman Service.
If upheld, this could also have a knock-on effect on a company's professional indemnity insurance cover and could result, if the company is found to have failed to do due diligence, in a significant fine.
With enough of these happening, it would not be too long before PI becomes even more expensive for brokers. At the very least, it would result in brand reputational damage, whether to lenders or to brokers.
Hollingworth says as the landscape is constantly evolving, businesses have a duty for "ongoing education and training" to keep the threat of financial crime and fraud high in an adviser’s priorities.
He says: "The introduction of sanctions is a good example where additional communication was important to keep advisers up to speed with a rapidly changing landscape."
But it is important to retrain and support the broker through that event.
Phillips says: "Sadly, we do hear anecdotally of brokers being dismissed at the first sign of an issue. With our approach, a brush with fraud becomes an opportunity to seek support and improve standards, rather than a loss of livelihood.
"As a result, we have seen brokers that were once devastated by a fraudulent case really bounce back, submit better business and ultimately become better brokers.”
Simoney Kyriakou is editor of FTAdviser
