Unfortunately, this is not true in the later life lending market and I suspect that we are in for a bumpy ride unless we address this issue head on.
Under the current mortgage regime, those with CeMAP can advise on retirement interest-only (RIOs) mortgages as well as later life mortgages but not equity release.
On the other end of the scale, those with CeRER tend to specialise in equity release and may be less up to date on the rapidly changing residential mortgage market.
And therein lies the issue, when the customer – to use the analogy above – wants a coffee, they don’t want to be told all that is on offer is a decaf RIO, but rather they want to know about their full range of later life beverage options.
Mandatory referrals miss the point
Lots of questions are being asked and a considerable amount of thought is being put into the answers.
First, I don’t think that only those who have CeRER should be able to provide later life lending advice as there are a significant number of mortgage brokers who are providing older clients with good trusted advice.
If all a highly financially literate older customer wants is to extend their mortgage for five years until they can pay it off, do they need to have in-depth information about equity release?
Nor do I think that there should be one over-55s mortgage qualification, as encouraging someone to provide advice on products they may only discuss with one client every 12 months is not the route to parity.
And while mandatory referrals might seem like a good idea, I think arguably we might be missing the point.
The later life lending market has products suitable for a wider range of customer aspirations and needs.
Empower brokers and advisers
What we need to do, is empower the brokers and advisers who operate in this space to better serve their customers or signpost them in the right direction.
If all you know about equity release is based on hearsay, then mandatory referrals not only won’t work but they will be resented and detrimental for all concerned.
Who should I refer? Who is better served with a RIO than equity release? We need to help firms make smart choices.
There is much to do but if we get this right, whether a customer visits a high street mortgage broker or an equity release specialist, they will receive access to the same options and end up with the right product for their individual circumstances.