It’s for this reason that I was very pleased to see the Association of Mortgage Intermediaries (AMI) coming out so forcefully against the idea of stand-alone equity release qualifications.
This suggestion emerged following on from the Financial Conduct Authority’s (FCA) competition review, which noted that some investment advisers were being put off from ‘selling’ equity release because it requires not only an equity release qualification but also an appropriate mortgage one.
The proposal appears to be that we should be making it easier for investment and pensions advisers to be involved in the equity release market, because by doing so more consumers will have access to the most appropriate advice.
The idea of a stand-alone qualification appears to have gained some traction, with a recent poll conducted by the Society of Mortgage Professionals (SMP) saying 61% of its members backed the idea. The trade body wants pensions and investment advisers to be able to sell equity release products, even if they’re not qualified to provide mortgage advice.
To be clear, we at the LLA fundamentally disagree with this idea and I can safely say that we also believe it will send consumer delivery of equity release/later life advice backwards. Not only are we vociferously against stand-alone qualifications, we actually think the industry should be actively moving in the other direction; we need an exam structure that recognises advisers’ particular skills when dealing with all the needs of older clients.
This should not be a piecemeal approach that gives a few easy ‘ins’ to those advisers who might want to push out some equity release products now and then. Instead we would like to see a fully-rounded later life qualification that covers all the needs that a later life client may have, such as later life lending, savings and investments, pensions, estate planning and tax and benefits.
While this might be a broader goal, when it comes to down to brass tacks, the notion of this stand-alone qualification also works to ignore many of the new breed of products that have been launched in this space over the past couple of years, and require a mortgage qualification. For instance, advisers who have a stand-alone but no mortgage equivalent would be ignoring new ‘transitional products’ from lenders such as the Family Building Society, the Marsden, or Hodge, to name just three. We could be in a position where the ‘adviser’ sells a lifetime mortgage product to a client when a transitional product, or even a traditional mortgage, would have been far more appropriate simply because they have ignored mortgages due to their lack of a qualification.
In my view, this would be an entirely retrograde step and the regulator, and adviser professional bodies, should think very carefully about the repercussions for customers in taking this forward. We need to move towards a more joined-up, later life-focused approach rather than a top-up in one specific area just so we can get some more advisers selling a certain type of product. If that’s the case, you might as well go for a top-up qualification which only covers products beginning with the letter ‘A’ – this would be just as arbitrary as the one suggested for equity release.