The Financial Services Authority (FSA) is considering putting mortgage intermediaries through exams before they can advise on lifetime mortgages.
A spokeswoman for the FSA said the plans were still in initial stages and as yet there were no details on the content or timing of the exams. She said: ‘We are looking at it and one option might be to add on a module [to existing exams] to cover lifetime mortgages. We have established working parties and talked to institutes, consumers and the MCCB about what knowledge they think is required by intermediaries. We will be using this information to draw up proposals.’ She said the FSA expected to have plans in place in the next few months and would consult on it with the industry as an independent issue.
Chris Cummings, director at the Association of Mortgage Intermediaries (AMI), said: ‘AMI recognises that lifetime mortgages are higher risk than standard ones. When an intermediary is advising on these products they will need to consider a number of factors: the grants available, the tax implications, availability of means tested benefits and the age and health of the borrowers.
‘The scope of this knowledge, and its local application, means that these products require specialist knowledge and, without doubt, professional advice. So AMI supports the need for a qualification which recognises the added professionalism of those who choose to advise on lifetime mortgages. Such qualifications add to the credibility and standing of our industry ‘ and reassure clients that they are receiving advice that they can rely on. However, the exam needs to be incorporated into the overall qualifications for intermediaries.’
Stephen Atkins, compliance director at Mortgage Next, said: ‘I think it is beneficial to both the intermediaries and the end user as some detailed knowledge is essential for lifetime mortgages. However, I hope that when I see the proposals they do not go so far as to stop people from giving advice in this area.’ Atkins said the main issue would be deciding who would handle the exams.