The Financial Conduct Authority have decided against launching a standalone equity release qualification.
After receiving “mixed feedback” as to whether there was a need for the qualification within the market, the regulator outlined its reasoning for choosing to not introduce the alternative approach.
Delivering a policy statement, the FCA highlighted the feedback they’d received, stating that the majority of respondents did not feel that “an alternative to the current approach would lead to a significant increase in the number of people appropriately qualified”.
The FCA also commented on the respondents’ varying viewpoints when it came to comparing the top-up and standalone approaches. The responses were largely dependent upon the favourability of “holistic retirement advice and the ongoing need for mortgage content in an equity release qualification”.
The ability to deliver holistic advice, according to the FCA, was seen by many law firms as favourable, yet the views on how best to do so varied. In relation to being able to give sound advice on equity release, a “solid understanding of mortgages” was cited as the most essential competency. The regulator concluded by highlighting the ongoing relevance of the feedback, stating that if they “consider this matter again in the future we will take the views received in this consultation into account.”
Commenting on the decision was Nigel Waterson. The Chairman of the Equity Release Council drew attention to the diverse needs of consumers, stating that they require advisers who are able to offer expertise on a range of different matters.
“We welcome the FCA’s decision not to develop a standalone equity release qualification, which is a clear win for consumers. Different consumers have different needs, and advisers need a comprehensive knowledge of a range of potential solutions – including those available via the wider mortgage market – to provide well-rounded advice.
“It is hugely encouraging that the FCA remains willing to consult and work constructively with the sector on a range of issues. Its decision to stick with the status quo on equity release qualifications does not prevent industry considering further progressive moves to join the dots between the equity release, residential mortgage, pensions and later life arenas.
“As our recent white paper set out, consumers can increasingly benefit from a structured approach to financial planning in retirement that takes all their assets into account.”
The Association of Mortgage Intermediaries recently stated that it “strongly disagrees” with the proposal, describing the introduction of a standalone qualification as “drastic and illogical”.
As the industry moves from simply providing a product which is pure ‘equity release’ to offering hybrid products, the Association acknowledged the growing need to link mortgage advice with equity release.
Delivering a statement, the AMI queried the intentions of advisers seeking to gain an equity release qualification in isolation.
“We would seriously question the motive behind an adviser who wants to be able to advise on equity release but doesn’t want to consider other mortgages or to become qualified to do so. It is even more concerning if there is a desire to do this only on an occasional basis.
