A prominent firm in the mortgage sector says a fundamental overhaul of adviser qualifications is needed, arguing that the current system leaves older borrowers at risk of missing out on suitable borrowing solutions.
Key Group, an equity release adviser, has called for the unification of the CeMAP qualification - required for mainstream mortgage advice - and the CeRER, which covers equity release. The firm’s intervention comes as the Financial Conduct Authority (FCA) reviews the future of the mortgage market, with a particular focus on how advisers can better serve clients aged 55 and over.
Charlotte Allen, chief risk and compliance officer at Key Group, said that introducing a single qualification to advise on all types of mortgages, including later life lending, would ensure that those over 55 are offered the right options.
Key Group’s submission to the FCA highlights the growing complexity of later life borrowing. With more people entering retirement while still carrying mortgage debt, and with products such as retirement interest-only (RIO) and flexible lifetime mortgages becoming more prevalent, the firm argues that the traditional separation between mainstream and equity release advice is no longer fit for purpose.
Allen continued: “That is fully in line with Consumer Duty obligations and should be considered seriously as part of the FCA’s mortgage market discussion. All advisers must advise and not simply be order takers. Often, customers come to advisers not having the information they need to be making informed decisions. Whether you are an equity release specialist or a mainstream adviser, not defaulting to one product type, not passively facilitating a remortgage or product transfer, considering all options and being prepared to challenge customers on their preconceptions should be part and parcel of the role.”
The proposal does not require every adviser to provide advice on every available product. Rather, Key Group insists that all advisers should possess a foundational understanding of later life lending, enabling them to discuss the full range of options with clients or refer them to a specialist where appropriate.
The firm is also advocating for mandatory continuous professional development (CPD) to include content specific to later life lending. This, it argues, is essential in a market where innovation is rapid and customer needs are evolving.
“The current qualifications regime does not reflect how the product landscape and customer needs have evolved in the later life lending market. Customers are coming onto the property ladder later, mortgages often have longer terms and taking mortgage debt into later life is becoming the norm. All advisers should be able to talk to older customers about all the options available to them, even if some products are outside of the scope of the advice they wish to offer, and introducing a single qualification alongside industrialising referral mechanisms would be a positive step in breaking down the current silos and improving outcomes,” Allen said.
With the FCA’s consultation drawing to a close, the industry awaits a decision that could reshape the way advisers are trained and qualified, ensuring that the needs of an ageing population are met with expertise and care.
