Clear communication is key when advising clients about the Modified Affordability Assessment (MAA). While the rules are permissive, meaning Lenders can decide when and how to apply them, consumers need to understand what this means for them. Advisers should explain the criteria for eligibility, the potential savings available, and any ongoing responsibilities the borrower will have. Importantly, clients should also be made aware of any risks, particularly if their circumstances change and affect future affordability.
It’s equally important to manage expectations. Not all Lenders will choose to adopt the MAA, and some may still require a full affordability assessment, particularly if they have concerns about consumer harm or want additional assurance on the borrower’s financial position. Advisers should prepare clients for these possibilities and help them navigate the process confidently.
Documentation remains a critical part of demonstrating compliance and good practice. Advisers should record how suitability and affordability were considered, why a modified assessment was appropriate (or not), and how they explained the implications to the client. This not only evidences compliance with the Consumer Duty requirements but also demonstrates that clients were supported to make properly informed decisions.
