The customer must be provided with a demands and needs statement which must show (in summary) the information that was gathered in the assessment stage. This can be by referral to a tick list, the information given or a simple summary of the information.
If a recommendation is being made for an advised sale, then there must be an explanation as to why the recommendation is being made and what it is based on. If a tick box basis is used, then the recommendation can state that because all the box’s have been ticked the recommendation is appropriate.
It should be remembered that the recommendation does not have to be made from a selection of several polices. A choice of one mortgage protection insurance policy is sufficient so long as it fits the demands and needs of the customer.
If the sale is an advised sale then the demands and needs letter and any personal recommendation must be kept by the intermediary for three years.
Final note
The above only represents the stage that must be incorporated into a compliant process, and there are many more valid variations.
The above is based on an advised sale, and in view of the criticism of the mortgage protection market it is perhaps advisable to under take an advised sale rather than a ‘take it or leave it’ sale.