"Now we know that there is broad support for it from those who understand the market best, those within the adviser community, there is little reason for the FCA not to follow through"
What's more, the average amount customers released from their home was also up approximately a massive 30% according to our own figures and that of other adviser firms. However, despite all this good news, we are still regarded as a just small corner of the wider mortgage market – and understandably so. The £2 billion released last year is of course dwarfed by the value of the mainstream mortgage market, but there are signs that equity release could be making moves to become a bigger player.
To achieve what I think we can achieve in equity release we need to support everything that strengthens the market and adds credibility to what we do. I will always support new lenders, new products, new advisers, and anything else that adds to the progress we are all working for. Customers need choice and options, but they also need advisers with the skills and capability to explain these options thoroughly, so it is great to hear that there appears to be a clear appetite for a stand-alone qualification within equity release.
The Society of Mortgage Professionals and the Personal Finance Society questioned 1,000 of its members and found that some 77 per cent supported a stand-alone qualification. Back in September of last year I was one of several industry commentators who responded positively to the FCA's announcement that they were considering creating this type of qualification, so it's great to see that there is broader support. At the moment, there is a risk that some advisers are only using equity release as a 'top-up' to their standard mortgage business, and we must remember that the styles of advice are very different between equity release and the mainstream mortgage.
There are many issues that have to be considered when advising on equity release that do not arise in the traditional mortgage arena. For example, the soft skills required in handling customers and their families questions and concerns; knowledge of the affect lifetime mortgages can have on entitlements to certain state benefits; balancing the emotional and financial outlook of clients; or the fact that advisers need to fully understand all the alternatives and present them to every customer are just a few reasons why equity release is different, and a stand-alone qualification that concentrates on equity release and all the other essential elements required in the advice process will enable advisers whom do not want to advise in mainstream mortgages the option to become qualified.
But the reasons why we should support this qualification go beyond the differences in how advice is given. Now we know that there is broad support for it from those who understand the market best, those within the adviser community, there is little reason for the FCA not to follow through, especially when they are acutely aware of the need to support later life lending, as things like the interest only timebomb, which is set to go off over the coming years, are due to leave many homeowners staring at a retirement beset by financial difficulty. Creating this qualification would be a great signal to the whole market that the regulators are well aware that equity release has a role, and a significant role at that, to play in the task we are all faced with in helping people finance their retirement.
Ultimately, this qualification is just another step in legitimising modern equity release. I believe it will be another step in leaving behind the issues of the past, and, one hopes, will help us all help more customers achieve the retirement they want and deserve. We have a long road ahead but I think £2 billion will seem pretty insignificant by 2020, and as the value of our market has doubled in just a handful of years, not to mention new heavy-hitting and well-known lenders having joined the market, I am confident we will see more advisers become qualified. Over to the FCA to set this in stone.
