Key, the UK’s largest equity release adviser, has urged the Financial Conduct Authority (FCA) to overhaul mortgage qualifications so that later life lending forms part of the standard framework for all advisers.
In its submission to the FCA’s Future of the Mortgage Market discussion paper, which closes later this month, the firm argues that merging the mainstream CeMAP qualification with CeRER, the equity release qualification, would ensure that older borrowers are consistently presented with the full range of options.
The FCA has asked for views on whether borrowers in later life are receiving holistic advice and how regulation could improve access to information. Key says that a combined qualification for the UK’s 37,000 mortgage advisers would help prevent outcomes being dictated by the type of adviser a customer happens to meet at the outset.
Charlotte Allen, chief risk and compliance officer at Key Group, said: “Introducing a single qualification to advise on all types of mortgages, including later life lending, would ensure that those over 55 are offered the right options according to their circumstances and be a step towards removing the lottery of outcomes being determined by what type of adviser a customer happens to engage at outset.
“That is fully in line with Consumer Duty obligations and should be considered seriously as part of the FCA’s mortgage market discussion.”
Key also called for continuous professional development requirements to be updated so that advisers remain current on fast-moving product developments. Innovations such as retirement interest-only and term interest-only mortgages, as well as flexible repayment features on lifetime mortgages, are increasingly relevant to customers approaching or in retirement.
Allen added that the qualifications regime had failed to keep pace with the changing market. “Customers are coming onto the property ladder later, mortgages often have longer terms and taking mortgage debt into later life is becoming the norm.
“All advisers should be able to talk to older customers about all the options available to them, even if some products are outside of the scope of the advice they wish to offer, and introducing a single qualification alongside industrialising referral mechanisms would be a positive step in breaking down the current silos and improving outcomes.”
The FCA’s consultation closes on 19 September.
