The ability to upskill seriously hindered by lack of specialist qualifications
The recent announcement by the London Institute of Banking and Finance (LIBF) of its update to the Certificate in Regulated Equity Release (CeRER) qualification is certainly welcome. The syllabus covers more lifetime mortgage topics in greater detail including information on areas such as vulnerable customers, handling complaints and power of attorney.
But, even here, we may wonder whether the current qualification system works for any particular group?
For instance, we will still have mainstream mortgage advisers able to provide advice on retirement interest-only (RIO) mortgages and interest-only options for later life borrowers, with no incentive to refer out to an equity release specialist, even when a lifetime mortgage might be more suitable.
These could be advisers who secured CeMAP or the equivalent 15 to 20 years ago and have not had their knowledge updated and tested since then. And we include ourselves among that.
CeRER is the specialist qualification for equity release, but what about all the other specialist areas that now exist within the wider mortgage and lending market?
Where are the specific qualifications in those specialist sectors so that an adviser can prove their knowledge and understanding, and ultimately deliver greater confidence to their client group in those areas?
They simply don’t exist. For instance, ten years ago limited company buy-to-let was a very small part of the sector; now that has changed considerably, and yet there is no specialist qualification in this area.
How might limited company borrowers be confident in the ability of their adviser in, what can be, a very complicated area?
Failing to keep pace with the market
In essence, the exam framework has not kept pace with the market and the move to specialist advice, and therefore we have an adviser base ‘qualified’ to offer advice right across the board, but with the client completely unaware of their true expertise in these sectors.
Our belief is that advisers would welcome a wider choice of specialist qualifications they could secure because it could be a selling point for their business and would give their clients’ greater confidence in their ability. In a way, it gives advisers a greater incentive to specialise because those qualifications would set them apart from their peer group.
There’s no doubt that the industry needs to upskill practitioners, but our generalist qualification framework doesn’t fit the needs of those advisers.
Even the post-CeMAP diploma can’t truly be said to deliver a separation between generalist and specialist adviser.
Alongside this, is the need for a new regulatory approach which insists upon non-specialists having to refer clients on if they do not possess the qualifications. Otherwise we are left with customers either getting the wrong advice, or not being provided with any support at all.
The precedent is there for all to see in terms of the way the regulator treats independent financial advisers and their responsibilities to refer on clients, for example, like we have with defined benefit pension transfers.
Perhaps now is the time to migrate this approach across to the mortgage and later life markets and ensure we have a qualification system fit for now, rather than what might have passed muster at the start of statutory regulation.