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  • 04/12/2001
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How firms can ensure new recruits are sufficiently trained to offer compliant mortgage advice

At present, the process of ongoing training for new mortgage advisers appears to be a grey area with some firms initially employing brokers on their years of experience in preference to actual qualifications.

The Mortgage Code Compliance Board’s (MCCB) statutory paper ‘ Fitness and Competence Requirements for Registered Mortgage Advisers ‘ sets out to provide specific requirements for training advisers, but it has, until now, been used as guidance, rather than as compulsory rules.


Brad Baker, head of communications, at the MCCB, says: ‘When building training programmes, brokers should refer to the MCCB guidelines on fitness and competence. Trainees have a maximum of two years to attain competence and during this time they should be under supervision.’

Mortgage brokers have to assess the competence of the adviser and if necessary provide training, however it is up to the individual company as to how and what training they implement.

Following the guidelines outlined in the MCCB statutory paper, advisers should continually assess and review the relevance of their training programme. The paper states: ‘This is to ensure they remain effective and up-to-date, having regard to relevant changes in regulations, legislation, industry practice and the market place.’

Training programmes can be tailored to suit individual circumstances. At Mortgageforce, the mortgage broker franchise operation, new recruits are employed on the basis they have two years’ experience backed up with five years’ references . Preference is given to those who have passed CeMAP Paper One. Brokers are then sent on an in-house training programme.

Rob Clifford, managing director at Mortgageforce, says: ‘We have a five-day residential induction, one of which is specifically technology training. The rest focuses on enhancing their existing skills and competency. We also carry out a knowledge-gap analysis ‘ looking at the skills they have and, if any, the gaps. We devise a training plan which would allow recruits to pass CeMAP as soon as possible.’

Outlined in its requirements paper for advisers, the MCCB suggests that a training programme could include:

• A mixture of formal, academic and on-the-job training.

• Observations of sales interviews carried out by a registered mortgage adviser (RMA) who has attained the firm’s competence level.

• Review of cases. Looking at completed customer needs analyses and product confirmation letters (PCLs).

• Role plays with a competent RMA.

• Study and pass appropriate examinations.

• Sales interviews accompanied by a competent RMA.

• Reviews of all customer needs analyses and PCLs by a competent RMA.

• Investigation by an RMA of all cases not proceeding to completion and any complaints.

After completing a training programme such as the one outlined above, the MCCB recommends advisers undergo a formal assessment to ‘validate the advisers achievement of competence.’

Tougher standards

Clifford believes the mortgage industry has not benefited from formal training partly because the Financial Services Authority (FSA) has not set any standards for the competency of advisers.

‘The industry is reliant on the Mortgage Code which has been toughened up in the last eight months by the MCCB, introducing its training and competence requirements,’ he says.

To demonstrate it has complied with the guidelines on training, Mortgageforce keeps personal records for each of its mortgage brokers, a requirement of the Fitness and Competence requirements.

The requirements state that all firms must keep records for a minimum of three years following the departure of an employee and according to the MCCB guidelines, a training and competence record could include:

• The firm’s statement of competence level(s).

• An assessment of the individual at recruitment stage and the training and experience needs identified.

• Appointment of a supervisor.

• The date on which the trainee adviser commenced training.

• Progress reports.

• Annual reviews and training undertaken.

By failing to provide adequate training in the past, Clifford believes some brokers may suffer with the introduction of the regulatory examinations. He says: ‘The exams are a real threat and 75% of advisers still do not have CeMAP or MAQ, the compulsory qualifications. This could bring about a massive fall out in 12 months’ when advisers cannot give advice if they are not qualified. Looking at a quarterly examination like CeMAP Three, they only have four or five exam opportunities to go.’

The MCCB has issued similar concerns over those brokers who have yet to begin training for the examinations. In its monthly newsletter, it states: ‘It is of concern that a minority of all advisers have yet to start the process towards gaining one of the qualifications. It is therefore very important that those advisers who have yet to begin the process, do so as soon as possible.’

However, Baker believes the introduction of compliance will improve broker training. He says: ‘Compliance has begun to and will continue to raise the standards of training.’


A registered firm must:

• At intervals appropriate to the circumstances, determine the training needs of its RMAs and trainee advisers and organise appropriate training to address those needs.

• Ensure training is timely, planned, appropriately structured and evaluated.

• Ensure its RMAs and trainee advisers are aware of how the registered firm’s training, attaining and maintaining competence arrangements apply to their individual roles.

Source: MCCB


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