Purpose and core principles
This standard sets out what a defensible specialist lending file must contain, so that a firm can prove why each recommendation or referral was right for the client, years after completion.
Who it is for
Directly authorised mortgage firms, master brokers, packagers and the IFAs, accountants and estate agents who introduce clients to them.
What it covers
Second charge mortgages, regulated and unregulated bridging, and any case where secured borrowing consolidates existing debt.
What it is not
It is not legal or compliance advice, and it does not replace FCA rules. It describes good evidence against the FCA's existing expectations, mainly MCOB 4 (advising and selling), MCOB 11 (responsible lending), the Consumer Duty (PRIN 2A) and FG21/1 on vulnerable customers.
Why it exists
Complaints about secured lending often arrive five or more years after completion, through a subject access request or a claims firm. By then the adviser may have left and memory has gone. If the reason is not on file, the firm cannot defend the case.
Core principles
Every file should pass one test: could a stranger, reading only the file in six years' time, see why this was right for this client?
Reasons, not records
A fact find shows what the adviser knew. The file must also show what they concluded and why.
Written at the time
Evidence created at or before the recommendation counts. Notes added after a complaint carry little weight.
Alternatives shown, not assumed
Where a cheaper or simpler route existed, the file says why it was not used.
Total cost, not monthly cost
A lower monthly payment is never the sole justification for securing debt.
The client's words
Objectives and priorities are recorded in the client's own terms where possible, not in product language.
Willing to say no
A file can end in a decline or a referral elsewhere. That outcome is evidence of good practice, not a failure.
Proportionate
A simple case needs a short file. Complexity, vulnerability and consolidation each raise the bar.
The Specialist Lending File Standard is not legal or compliance advice and does not replace FCA rules. Information for professional intermediaries, not advice. Comment on the draft.