More mortgage education needed in schools say 87 per cent of students – LIBF
According to the Young Persons’ Money Index run by The London Institute of Banking & Finance, 82 per cent of students felt they were not getting enough access to a comprehensive financial education despite the subject being introduced to the national curriculum five years ago.
Of the 2,000 students aged between 15 and 18 questioned, 60 per cent said they wanted to learn about the practicalities of managing money as a separate subject while 62 per cent said they worried about money.
Still not enough access
Currently, 64 per cent of students say they have access to financial education compared to only 29 per cent in 2015.
However, the index found most were taught financial education as part of other subjects and the majority did not receive financial education regularly.
Just 18 per cent of respondents said they had access to financial education within the last month, 16 per cent in the last term, 17 per cent in the last year and 15 per cent said they last received financial education over a year ago.
Risk of negative impact
Catherine Winter, MD of financial capability at The London Institute of Banking & Finance said: “The current approach is just not adding up. It’s time to give this subject the attention, and lesson time, it deserves.
“Unless something changes soon, we risk failing yet another generation and negatively impacting society for generations to come.
She added: “Financial education should be included in the Ofsted Framework – effectively making it compulsory – and ideally taught as a standalone subject.
“However it’s delivered, it needs to have dedicated, regular, classroom time, with clearer guidance for teachers on what they need to cover.”
Equity release certificate changes meet needs of more complicated and growing market – LIBF
Demand is growing rapidly – from July to September 2019 the number of UK homeowners aged 55 or over who unlocked wealth from their properties rose by eight per cent, according to recent figures from the Equity Release Council.
It’s not difficult to understand why. We’re an ageing population, and we’re living longer.
We all know there are shortfalls in many people’s pensions provision, so finding other ways to fund our plans for a longer, hopefully healthier, retirement is becoming more pressing.
In recent years, we’ve seen a variety of new later life lending products come to market to meet this increase in demand.
Interest rates on equity release products are also becoming more competitive, and this summer started to fall below the five per cent mark, with 21 per cent of products priced at four per cent or lower.
But consumers are facing a baffling array of products and services, all trying to address their very different – and often complex – needs.
To serve these customers properly, advisers must have a detailed understanding of the range of options available, and what’s appropriate for the different stages of later life. That means developing specialist knowledge.
Our updated Certificate in Regulated Equity Release – developed in consultation with the Equity Release Council, UK Finance, and major high-street banks and lenders – aims to address the changing market, and changing consumer needs, to help advisers meet the demands of this ever-growing complicated sector.
We worked closely with the industry to ensure the qualification – and knowledge it provides – remains up to date and fit for purpose. So, what are the main changes?
We’ve increased the number of topics from three to six. This has enabled us to incorporate broader and more detailed coverage of lifetime mortgages.
We also wanted to improve our teaching in relation to vulnerable customers, powers of attorney and complaint handling. And we’ve improved the digital learning content – incorporating more videos, animations and quizzes.
The wonderful thing about working in financial services is that it is always evolving and there are always opportunities to keep learning. Our job is to help ensure that advisers have the knowledge and skills they require to be able to do a great job for consumers.
Equity release exam changes revealed
LIBF said it had made “fundamental changes” with the number of topics being covered increased from three to six, with new content including broader and more detailed coverage of lifetime mortgages.
Key improvements have also been made in the text in relation to vulnerable customers, powers of attorney and complaint handling.
The body said it was making the changes to best equip advisers in the broader later life lending and encourage “a joined-up approach to later life financial planning”.
Exam live 6 January
In September, Mortgage Solutions revealed that industry trade bodies had been working with the examiner to modernise the qualifications to meet the market evolution.
The Association of Mortgage Intermediaries and Equity Release Council agreed that later life lending had seen so many rapid changes it was vital to broaden the qualifications to be fit for all later life advice.
More 2 Life CEO Dave Harris also gave the updated qualifications his blessing.
The new exam can be sat from 6 January 2020 with students studying the current version of the course able to sit the exam until 5 January 2020, using the existing specimen paper as a basis.
Students who have already purchased the existing Specimen Paper A will automatically be given online access to the new specimen paper when it becomes available.
A digitally enhanced course site has also been developed which includes videos, quizzes and animations.
New course content includes recorded interviews with members of the Equity Release Council and senior figures from within the equity release market.
There are more practical examples and case studies that advisers can use in their day-to-day role.
LIBF director of corporate and professional learning Mark Heaton noted equity release products were changing rapidly, and the market was seeing growth.
“As a result, we’ve been talking to the sector to make sure that our Certificate in Regulated Equity Release remains relevant and up to date,” he said.
“We’ve made fundamental changes to the content, study text and course materials to reflect industry priorities and consumer needs.
“This updated certificate provides advisers with a solid grounding in everything they need to know about the market, products and regulations to enable them to give their customers the best advice possible – with practical examples that really help bring this to life.”
Equity Release Council chief operating officer Donna Bathgate welcomed the LIBF’s certificate overhaul as “a great step forward”.
“Today’s retirement landscape has evolved significantly with consumers facing a wide range of products and services to meet different and complex needs,” she said.
She continued: “The update will ensure that the learning materials are reflective of today’s equity release market; are case study driven and interactive.
“In doing so, LIBF has established a platform to best equip advisers in the broader later life lending sector, one that will encourage a joined-up approach to later life financial planning that considers all wealth and assets.”
Equity release qualification to be overhauled
The body confirmed the plans to Mortgage Solutions and said it had been in discussions with bodies across the industry. It is finalising the details which will be published in early November.
A spokeswoman told Mortgage Solutions: “The changes being made reflect the changes in the sector.
“We have talked to people in the industry and done this in consultation with them.”
Mark Heaton, director of corporate and professional qualifications at the LIBF added: “We are in the process of updating our Certificate in Regulated Equity Release to ensure this qualification keeps pace with changes in the sector.
“More information will be provided when we launch the updated qualification on 4 November.”
Last month Mortgage Solutions reported that discussions to update the CeMAP and CeRER qualifications were underway between trade associations and the examining bodies.
Association of Mortgage Intermediaries chief executive Robert Sinclair said: “There appears to be recognition across the market that the existing qualifications in both pure mortgage and equity release markets are not as deep or robust as responsive market participants would want them to be.”
Simply Academy said the changes will come in to force for students wishing to sit the examination on or after 6 January.
It noted that the syllabus overhaul will include both content and layout changes, but at present, the specifics of the updates are still to be confirmed.
“The LIBF also anticipates a further syllabus update in April to incorporate any changes due to the budget and Brexit, in line with their usual structure,” it said.
Peter Lingley, chief operating officer of Simply Academy said it was unclear how much the CeRER syllabus would change in this in-depth revision and whether it would have an effect on the length and structure of training courses.
Mortgage advisers would recommend advice career – LIBF
The institute surveyed almost 400 qualified advisers to find out their views on the market. It found that despite Brexit related uncertainties and economic challenges ahead, four in five (80%) respondents would recommend a mortgage advice career to a young person, with 86% saying that helping customers achieve their life goals is one of the most enjoyable and rewarding aspects of their role.
Asking what respondents thought were the most significant challenges for mortgage advisers when delivering good customer outcomes, LIBF found that 50% of those surveyed pointed to restricted availability of high loan-to-value (LTV) mortgages, 54% to stress tested rates for buy-to-let (BTL) lending, 70% identified complex affordability criteria, and 50% thought there was too much regulation.
Meanwhile, 85% of mortgage advisers agreed that regulation was providing greater consumer protection, and 80% thought that the Mortgage Market Review (MMR) has improved the quality of mortgage advice given to customers.
However, 34% of respondents thought there is a need to further amend mortgage regulation for residential mortgages, with 44% disagreeing with that opinion.
Moreover, 85% of those surveyed said that simplifying the selling and buying process would have a positive effect on the market, with 93% wanting stamp duty reform.
“With the challenges and uncertainties facing the mortgage market, professional training and qualifications have a critical role to play in helping advisers navigate the challenges, ensure compliance and get the best outcomes for their customers,” said Brian Wilkinson, managing director, corporate and professional qualifications at LIBF.
“That’s what advisers say is one of the most enjoyable aspects of the role,” he added.
Wilkinson continued: “It’s encouraging that over 100,000 advisers have now qualified with CeMAP, with around 1,400 also completing advanced CeMAP Level 4 qualifications. Advisers tell us that CeMAP can also be a route to other career options, such as retail banking, wealth management and financial advice, so it’s a great foundation.”
Michael Fowler, a mortgage adviser at the Halifax and the 100,000th adviser to qualify with CeMAP, said: “CeMAP has been really helpful in preparing me for my mortgage career. Having a professional qualification gives me real confidence in my role and helps me to provide the best possible service to customers.”
Higher-level CeMAP qualification launches
The qualification covers the commercial and regulatory environment, products, services and legislation that inform the mortgage advice process. To gain the diploma, advisers will need to complete a new level 4 Advanced Mortgage Advice unit.
Brokers are required by Financial Conduct Authority (FCA) regulations to complete the level 3 CeMAP in order to carry out compliant business. The new module is not mandatory but intends to help brokers gain an understanding of the importance of consumer-oriented advice, sound communication and appropriate ethical behaviours.
Martin Day, managing director, corporate and professional qualifications at The London Institute of Banking & Finance, said: “The UK mortgage market is dynamic and complex and it’s clear that in order to offer the very best service to their clients, advisers have to ensure their skills are highly relevant and up-to-date. CeMAP has achieved recognition as the leading regulated qualification in this market and, building on this success, many mortgage advisers will want to continue their professional development, beyond what is required by the FCA in order to practice.
“The new CeMAP Diploma will allow these advisers to develop their skills and demonstrate to clients their proficiency and understanding of the latest trends and developments, allowing them to enhance the service they provide.”
The Chartered Insurance Institute (CII) offers its own optional qualification, Level 4 Certificate in Advanced Mortgage Advice, which gives advisers the opportunity to develop their advice skills further. It also aims to help advisers diversify into areas such as bridging finance, auctions, financing foreign properties and other specialist types of mortgage lending.
According to figures published today by the Society of Mortgage Professionals (SMP), 500 mortgage advisers have completed the certificate since its launch two years ago.
SMP head of professional development, Lee Travis, said the news was “testament to the growing desire within the mortgage market for a higher level of professional qualification”.