Part two: Learning technique
Two weeks ago, I shared the start of my journey towards studying for a new qualification, the Chartered Insurance Institute’s (CII) certificate in advanced mortgage advice.
Since obtaining my Level 3 qualification before the financial crisis I have witnessed the market go through immense changes. Huge pieces of regulation have been implemented that have defined how the advisers of 2017 work, namely the Mortgage Market Review (MMR) and more recently, the Mortgage Credit Directive.
Studying for the higher qualification has not only ensured I am up-to-date with market happenings but has also enabled me to learn beyond the requirements so that I have a deeper understanding.
There are four principal aspects that will appeal to advisers:
Key elements of the mortgage process (a third of the exam is based on this)
While advisers will be familiar with this particular element of the learning, for many, this could serve as a much-needed refresher due to the time that has lapsed since they originally qualified. Additionally, there may also be some key learning which advisers can put into practice to improve their interactions with clients.
A great refresher for me was the term “marriage value”, which is the additional value created by bringing the leasehold and the freehold values of a property together (when the leaseholder purchases the freehold).
The exam may require an adviser to explain the factors a lender will use to assess the suitability of the borrower. This could be something many advisers will never have been examined on, given that a lot of this changed post-MMR.
Specialist types of mortgage lending (approximately 20% of the exam)
As the mortgage market evolved after the credit crisis and brokers obtained a bigger share of the market in comparison to lenders dealing direct with clients, specialist lending has been booming. New lenders and products are entering the market frequently and existing lenders continue to innovate and change criteria to stay relevant in a highly competitive arena.
A broker looking to diversify and extend their business into more niche areas will benefit from the qualification by learning about the different solutions available for their client – such as second charge lending, bridging, equity release, foreign mortgages, Islamic mortgages and buy-to-let (taking into account the changes in this sector).
Something that I did not know prior to starting this journey was that when a client takes out a further advance on their original mortgage as well as a second mortgage, if the original mortgage deed permits additional borrowing up to an agreed limit, this means that the lender of the second mortgage is not required to postpone the ranking of its charge.
Key elements of appropriate mortgage advice (approximately 15%)
Highlighting some of the background knowledge advisers should posses to consider a client’s wider circumstances, as opposed to just focusing on the mortgage and associated protection.
Appropriate mortgage advice to clients with complex needs and circumstances – this is examined using case studies (approximately 27%)
Ultimately the learning will give advisers the ability to service their client, regardless of how complicated their circumstances are. This will help with client acquisition/retention and the use of practical case studies really helps to put the learning into context.
A small final part of the assessment covers the current mortgage market and challenges within it.
Dedication’s what you need
Worthwhile as it is, I would caution anyone considering embarking on the road to L4 that it is not a walk in the park.
Like all meaningful qualifications, it requires a high degree of dedication to work one’s way through the wealth of study material. I would certainly put aside at least a couple of hours a week in order to see it through effectively.
But there are numerous benefits to be reaped along the way in terms of what you learn.
For example, I significantly increased my knowledge of buy-to-let – and in particular the ramifications of the new tax liabilities – which is expertise I would be able to pass on for the benefit of customers if I was in an advisory role.
Bridging loans was another area where I was able to appreciate some of the ongoing benefits of the course. I have never dealt with them in my career, but now have a good understanding of how they work and also the alternative solutions that are available in the market.
Progressive learning like this not only increases your knowledge, but also your confidence when dealing with clients, as it enhances your overall credibility. The value of that cannot be underestimated.