There is broad support from the adviser community for a standalone equity release qualification, according to a new survey.
The Society of Mortgage Professionals and the Personal Finance Society conducted the research following the Financial Conduct Authority’s consultation on the merits of this type of qualification for advisers.
Of the 1,000 members questioned about what form the qualification should take, 61 per cent said they thought it should be a separate top-up to existing pension and investment qualifications.
But 77 per cent believed investment advisers that do not already hold mortgage qualifications, particularly those active in giving later life advice, should seek to acquire a standalone equity release qualification.
Vishal Pandya, operations manager at the Society of Mortgage Professionals, said: “The results show a clear appetite amongst advisers for a dedicated new qualification, to adequately reflect the recent rapid growth in the sector.
“Our members would appear to agree with the FCA that the current structure of the existing equity release qualifications may be a barrier to a wider number of consumers wishing to access the product.”
He explained: “Lifetime mortgages are the main form of financial product consumers used to release equity, so when the Appropriate Examination Standards (AES) for equity release were first developed it was natural to use an approach that built on an existing knowledge of mortgages.”
But he also warned that while a standalone qualification could increase the number of advisers able to recommend the product, it might cause concern should the adviser not have adequate knowledge of conventional mortgages to begin with.
Claire Walsh, chartered financial planner at Aspect 8, agreed.
She said: “I think if someone is advising on equity release they should understand mortgages too.
“A lot of the people in the equity release market could qualify for a normal mortgage but if you didn’t know about that you [advisers] wouldn’t be able to advise on it. I think it’s more about relevant product knowledge with mortgages because it’s more product-led than financial planning [is],” she added.
Martin Bamford, managing director at Informed Choice, said: “Part of the process for the Solla Later Life Accreditation is holding an equity release qualification.
"I studied for and passed the Chartered Insurance Institute paper ER1 to improve my knowledge of these options, despite never planning to advise on equity release myself or sell a lifetime mortgage.
“Topping up existing qualifications, especially those for pensions, should ensure that more advisers consider the option of equity release and refer to specialists where appropriate.”
Mr Pandya argued while equity release is no longer considered a niche area of the market, it was “unlikely that there would be an immediate surge in numbers” should the qualification be offered “in what is still deemed to be a specialist area with a relatively limited, albeit growing, market share”.