Qualifications are absolutely necessary and show a level of understanding and the ability to pass the exam in question, but they are not really a substitute for experience, ongoing knowledge, lender and provider access, soft skills, or any of the other vitally important elements of being a quality adviser.
In the later life space this is more the case than in many other sectors.
After all, you need the necessary equity release qualification and authorisation in order to give advice, but what about knowledge in other areas that will go a long way to determining the recommendation to be given?
Is the adviser concerned also adept in pensions, investments, wealth, long-term care, benefits, inheritance tax – essentially the vast array of later-life requirements? The answer unfortunately is likely to be no.
A recent article on Mortgage Solutions considered whether advisers securing greater levels of qualifications actually improved the standard of advice. Does securing certified adviser status do that? Is it merely a nice to have? Can it actually show a higher quality of advice to the client?
And it was interesting to see later life lending highlighted as one sector which requires so much more than just a mortgage or equity release qualification.
Fear of the unknown
Indeed, as we already know, mortgage advisers do not theoretically need an equity release qualification to advise on retirement interest-only (RIO) products – even though lots of lenders will require it – and there is a chance that an adviser will end up only advising on one product area, when another is actually more suitable for their client.
This perhaps goes to explain why RIO take-up has not been as we might have anticipated, because there is a fear factor involved in making the wrong recommendation, particularly at a network or larger firm level.
The big question of course, is where do we go from here in terms of securing an advisory community that has a fully-rounded view of all later life lending options, as well as the needs of those types of clients, which may not be directly related to their mortgage or equity release needs.
The adviser in the story mentioned above talked about having “a wider appreciation of financial matters affecting my older clients” and that has effectively hit the nail on the head.
Unfortunately we do not have a formal and holistic later life qualification that covers all these areas, and therefore – at present – advisers are left to do this in a piecemeal sort of way, albeit through organisations which deliver education, information and corporate benefits across all the relevant sectors.
What, however, we might hope to see is the regulator perhaps presenting a clear view and roadmap for advisers wishing to do more in the later life space and wishing to educate themselves but also prove they are not limited in scope.
Unfortunately, the regulatory approach to later life advice does tend to filter advisers into these silos – the major problem being that other wants and needs get neglected.
That clearly does not help either the adviser or the client and it’s my hope that in its next post-Mortgages Market Study report, the Financial Conduct Authority (FCA) shows it has reflected on this and has potentially earmarked a far more inclusive approach.
After all, this is going to be a growth area for advice for many years to come; indeed, it could be said to be one of the most important sectors for financial services in the years ahead.
It would be nice to think that we can get a competency framework, coupled with qualifications and overall understanding of the wide array of potential solutions, that not just suits clients but is the bedrock for the delivery of quality later life advice.