Sourcing & Letting Agent Bank Accounts are being refused!

19/02/2023

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Sourcing & Letting Agent Bank Accounts are being refused!

More and more Sourcing & Letting Agent Client Bank Accounts are being refused! These accounts are required to comply with Anti-money Laundering legislation and are designed to protect a client’s funds as well as agents fees.

Banks Closing Sourcing & Letting Agent Bank Accounts

It’s been reported that even large established agents have found banks unwilling or refusing to set up client accounts. Some banks have gone as far as to notify existing account holders that their accounts will close.

The problems seem to have begun with the tightening of (AML) Anti-Money Laundering Legislation from January 2020 but with the pandemic masking some of the effect.

This could have major repercussions in the Sourcing industry, especially for new sourcers and letting agents trying to get a foothold.

Client Bank Accounts are Essential

Operating without a client account is not permitted and if caught, the penalties can be eye-watering and you could even be barred from the industry for life.

But this issue is not limited to new sourcers and agents. As reported, large sourcing and letting agent businesses are facing the same headache.

Some banks are refusing to take on any new clients while others are putting more and more hurdles in place and in one case an agent was told it could take up to 6 months to set up the account.

No win Situation

So many agents are stuck in a no-win situation. They need a client account but can’t open a client account. One example that came to light was, in order to join Propertymark to need to have a client account but the bank won’t open an account unless you are a member of propertymark.

Part of the problem is that sourcers and letting agents are not regulated by the financial conduct authority (FCA) which seems to have banks concerned about their level of risk.

Sourcing and Letting Agents are obliged to register with the HMRC AML Scheme as well as a host of other compliance legislation which takes the annual cost above £1000 and add up to 200 hours of work, just on compliance.

But this isn’t giving the banks the confidence to expose themselves to the risk.

There are other issues at play as well. Many agents and sourcers lack adequate Professional Indemnity insurance and often their AML & GDPR policies, procedures and documentation fall short of compliance requirement

Can you mitigate the risk of Sourcing & Letting Agent Bank Accounts being refused?

Letting agents should prepare for a day when their bank tells them they have to close a client account. They must ensure they have AML membership, whether it is a legal requirement or not.

They should also acquire adequate Professional Indemnity Insurance, Client Money Protection and membership of an industry trade body.

Agents must put a plan in place and prepare for the worst. This issue will not go away and is likely to escalate over the coming months.

Is there another option? A solution?

YES, there is! We’ve got the perfect solution to avoid Sourcing & Letting Agent Bank Accounts being refused.

We recently launched our Complete Sourcing Agent Package with Compliance Vault.

(It’s also perfect if you’re an investor who wants to package and sell several deals a year.)

We teamed up with the industry experts and insurers to turn the burden of Property Sourcing Compliance into an advantage as well as give you the tools and platform to succeed in property.

Compliance Vault & Sourcing Agent Platform

Here’s what you get with the Sourcing Agent Platform and Compliance Vault:

Get Compliant with HMRC, PRS and ICO in Minutes
Future Proof with Legislation Auto-Updates
Full Professional Indemnity Insurance and JV Cover
No Hassle, No Stress, Fully Property Sourcing Compliant
Access our secure in-house escrow (no more arguing with banks!)
Your own white-label profile, fully branded with your logo for your investors
Showcase your properties to a global audience of property investors
Receive training, talk to in-house experts and so much more!

This takes away the worry and stress about client accounts. Our Secure in-house escrow is industry-leading and gives you complete security and protection for your fees and your investor’s funds.

I don’t know about you but I love it!

And even better… You get access to the most advanced property platform in the UK for Sourcers and Agents.

So, no more worrying if the bank will set up a client account, you get access to our secure in-house escrow services.

No more worrying about reaching the right investor, you get to showcase your properties to your own investors in your own branded profile as well as globally. (We had over 131 investors join us last month alone!)

This really is the complete package for Property Sourcing Agents and part-time sourcers to fully manage their business and property sourcing compliance.

How do you take advantage?

Simply Register on the link below to find out more, take a demo and speak to our wonderful team.

You’ll be glad you did!

→ https://sourcinginvestments.co.uk/property-sourcing-compliance/

PS: Don’t worry if your compliance isn’t up for renewal yet. Speak to our team who will take care of everything.

Chris Dowty

CEO, Sourcing Investments

(Pssst…)

Here’s More of What You Get…

When you join Sourcing Investments you get immediate access to the platform and Compliance Vault and you will receive the following:

→ Client Onboarding Document Suite

Full suite of documents for onboarding all client types – Customisable with your own branding

→ Professional Indemnity Insurance

You receive immediate cover from the only dedicated Agent PI Insurance Policy in the market, which covers you for all agent activities

→ Complete Compliance Documentation

You will be covered by a complete suite of Compliance Documentation: including Privacy Policy and AML Policy

→ Association of HMRC, PRS and ICO

We have done the hard work, so you will be covered under HMRC, TPO and ICO at the click of a button!

→ Secure and Safe

We hold your Documentation, Policies and Certificates in the Compliance Vault – so you always have peace of mind!

→ Auto Updates

We update everything automatically for all changes in HMRC or UK Government Policy

→ White Label Area

Your own fully branded page and profile where you can advertise your latest property finds to your own investors.

→ Secure Messaging

Our platform has secure messaging built-in as well as an app so you can speak direct to the investor, mortgage broker, refurb team and more.

→ Secure Escrow

Our in-house Client Escrow and Renovation Escrow mean you no longer have to rely on your bank for client accounts. You can simply click a button.

→ Challenged by refurbishments?

A complete project management tool for renovation is fully integrated into your deals. Ensure that you are paid for every deal using our Escrow Service.

→ Seeking serious buyers?

We help you access motivated, serious buyers who are ready to invest in UK property. Showcase your properties to the thousands of global investors visiting our site each month.

All of this for only £1200 per year! That’s up to 50% cheaper than the normal Property Sourcing Compliance process and you also save hours and hours of your time so you can find even more amazing properties.

Just one deal a year more than covers the cost of not only being fully property sourcing compliant but also giving you full access to the Sourcing Investments platform, your own profile, escrow, renovation management, education, training and the list goes on.