FCA scraps plans for standalone equity release qualification

"We recognise that a solid understanding of mortgages is, and is likely to remain, an important competency in giving equity release advice."

In a policy statement, the FCA said that "most respondents didn’t think that an alternative to the current approach would lead to a significant increase in the number of people appropriately qualified".

The regulator added: "We note that respondents had a range of views on the relative merits of a standalone versus top-up approach. These centred on two themes: the desirability of holistic retirement advice and the ongoing need for mortgage content in an equity release qualification.

"We also note that some firms would like to deliver holistic retirement advice but were mixed in their views on how to achieve this. We recognise that a solid understanding of mortgages is, and is likely to remain, an important competency in giving equity release advice. If we consider this matter again in the future we will take the views received in this consultation into account."

Nigel Waterson, Chairman of the Equity Release Council, commented: “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.”

Earlier this year, the AMI described "drastic and illogical" stating that it "strongly disagrees" with the proposal.

77% of members questioned by the Society of Mortgage Professionals and the Personal Finance Society believe advisers that don't currently hold mortgage qualifications, particularly those active in giving later life advice, would seek to acquire a standalone equity release qualification.

However the AMI said that calls from individual advisers who want to expand their business by having an ‘easy route’ to a particular product should be viewed with "extreme caution".

The Association also noted the increasing need to link advice on mortgages with equity release as the industry shifts from a pure ‘equity release’ product towards hybrid products which allow servicing and later interest roll-up.

In a statement, the AMI said: "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.