Fair Value Assessment

Consumer Duty Retail Customer Assessment of Price and Value at 31 July 2024.

In compliance with Financial Conduct Authority Rules, the purpose of this document is to explain the Dentons Mortgages approach to fair value and to provide other manufacturers and distributors with product information relating to our products and services. Dentons Mortgages is an independent provider of first charge regulated mortgages and mortgage protection plans for retail clients.

Dentons Mortgages is a trading name of Dentons Investment Services Limited.

Manufacturers and Distributors


Under Consumer Duty rules, the term ‘Manufacturer’ refers to firms that create, develop, design, issue, manage, carry out, operate or (for insurance and credit purposes only) underwrite a product or service.

Dentons Mortgages is a manufacturer from the point of view of designing and operating its own mortgage service. In regulated terms, the scope of this service is limited to First Charge Residential Mortgages, Lifetime Mortgages, and
Mortgage Protection Plans.

Dentons Mortgages is also a distributor of financial products that are designed by lenders, and has responsibility to maintain, operate and review product distribution arrangements for the products they distribute.

Manufacturer's General Obligation


Dentons Mortgages has made an assessment to ensure that its products and services provide fair value to retail customers in the target markets for those products and has made a commitment to review the assessment on an annual basis on the first January each year.

As manufacturer of their mortgage service, Dentons Mortgages will review the scope of its products and service, the target markets, and the method of procuring fees, together with a wider review of consumer support and consumer understanding. 

As well as the Consumer Duty, Dentons Mortgages is also bound by ‘suitability requirements’ covering ‘know your client’ information, affordability, due diligence on products and services and matching products and services to the client circumstances.

Distributors


Dentons Mortgages primary service is to function as a broker in the provision of suitable first charge residential mortgages to retail clients. This includes mortgages on a fixed or variable rate basis, lifetime mortgages and mortgage protection plans for the term of the mortgage.

When recommending the most appropriate mortgage, Dentons Mortgages will assess a lender’s Fair Value Assessment, which is a document designed under the Consumer Duty regulations, to summarise the key features and benefits of why a product or service offers fair value to the customer. Dentons Mortgages will only offer a product or service if the total package offers fair value.

Price and Value


For all the business types within scope, Dentons Mortgages will be paid a procuration fee directly from the lender, and our clients will not be invoiced. This means that clients are not usually charged any fees.

However, in certain circumstances, Dentons Mortgages reserves the right to charge the client a time-costed fee based on the mortgage adviser’s rate of £297 per hour plus VAT. You will be notified prior to any product or service if a time-costed fee is applicable.

For mortgages other than equity release, we reserve the right to charge a research fee of £195 but we will always let you know if this is going to be the case.

If Dentons Mortgages, were to charge a fee in addition to the lender’s procuration fee, then this fee would be compared to other mortgage brokers to ensure that it offers fair value.

Target Market


This varies according to the specific product or service, as follows:

Residential Mortgages

A first charge residential mortgage may be suitable for a retail customer who has sufficient income to repay the required loan and interest within a specified term before retirement. The customer will need to satisfy a credit reference and affordability check by the lender and provide security in the form of a first charge over the property to be mortgaged.

Lifetime Mortgages

The minimum age requirement is age 55 and the target market covers retail customers who have insufficient means of making capital or interest repayments but require a lump sum for a specific reason and are aware of the effects of gross rollup on the amount borrowed when the loan is eventually repaid, Customers are required to allow the lender a total charge over the property to be mortgaged.

Before recommending a Lifetime Mortgage, our mortgage advisers will establish whether a customer has alternative sources of capital. If this is the case, then a Lifetime Mortgage may not be appropriate. If the mortgage is for investment purposes, then mortgage advisers are not authorised to give this advice and will introduce the customer to a regulated investment adviser. Dentons apply strict limitations to the use of mortgages for investment purposes.

Mortgage Repayment Plans

These are pure protection plans designed to repay a mortgage in the event of death, critical illness, or some other specified event. They are targeted at customers who may have no other means of repaying a mortgage if their income were to cease for some reason.

Consumer understanding


In conjunction with Dentons Investment Services Limited, Dentons Mortgages will review all products and services to ensure that they are clear, fair, and not misleading, simple to understand and avoid using jargon. This includes regular reviews of the website and literature, obtaining customer feedback, issuing appropriate warnings, and reviewing the target market.

Customer Support


Vulnerability Policy

Dentons Mortgages has a vulnerability policy which includes the following.

  • Training is provided to all staff to ensure that customers are supported with their temporary or permanent vulnerabilities.
  • There are various means of support available to vulnerable clients including the offer of having another person (friend, family or professional) attend customer meetings to assist them.
  • Encourage clients to take out Powers of Attorney, where appropriate.
  • Refer clients to relevant charities or support organisations.
  • Mortgage staff are skilled in asking appropriate questions to establish if clients need support.
  • Keeping clear records of client vulnerabilities so we can be constantly aware of their need for support.
  • Financial resilience is an area that can particularly affect mortgage clients and the ability to withstand increasing mortgage rates and repayment of a mortgage.

Communication with Customers

Dentons Mortgages will communicate with clients in the most appropriate way that is in accordance with the customer’s wishes. Often mortgage discussions will be by phone, but face-to-face or written communications will be used as appropriate in line with customer preferences.

Monitoring Outcomes 


Under Consumer Duty, mortgage intermediaries are also required to keep management information in the following areas:

Lenders or the regulator, can request this information at any time, and this adds to customer protection within Consumer Duty.

  • Complaints and root cause analysis data
  • Evidence of adherence to a defined target market
  • Other customer outcomes related data (such as customer sentiment data)
  • Customer Understanding
  • Treatment of vulnerable customers.

Summary


In most cases, Dentons Mortgages do not charge direct fees to clients, but it still needs to demonstrate that it offers fair value to clients in other areas of Consumer Duty.

This document shows that Dentons Mortgages is clear about its classification within the distribution chain, its target markets for the products and services it offers, and its responsibilities to retail customers to help them understand the products and services on offer and to provide support to ensure good customer outcomes.