"Saying advisers need a separate qualification to help someone with a high LTV mortgage is like telling a baker they can bake bread but not hot cross buns."
If we set aside the inherent contradiction in that, then reading a lot of what is outlined in the DP suggests a more nuanced regulatory understanding of the positives of advice, albeit – as perhaps always – with a number of areas which are going to definitely require far greater clarity of what the proposals (or suggestions) could mean for advisers.
One of those is the notion of ‘enhanced advice’ and what the regulator means by this, and the product areas it appears to believe require a more ‘enhanced advice’ process. Especially when it also states that large numbers of advisers already go above and beyond what is required for their clients.
Where I’m struggling with the current FCA language in the DP is how it’s highlighting certain product types which it suggests deliver greater levels of arrears or risk – interest-only, second charges, high LTV, credit-impaired – as potentially requiring ‘enhanced advice’. That’s not, after all, a niche list, it’s a huge proportion of the market and one in which any adviser would conduct a lot of work.
Is the FCA saying only advisers with an additional ‘enhanced’ qualification or permission will be able to give advice in these areas? If so, we’ve been down this road before, and ironically, in this paper the FCA appears to be suggesting this is not working effectively.
That area – and it gets a whole chapter to itself – is later life lending, a part of which, equity release, has always required a separate qualification/authorisation in order for advisers to be active in this area.
Yet, as mentioned, the FCA seems to be suggesting the current status quo – the silo nature of later life lending and how it butts heads with mainstream mortgage advice – is not working. That it would be better if there was a much more holistic advice approach taken, one presumably where every adviser is able to look at all the options available to every single older borrower customer, and not just the ones they have the qualification/authorisation for.
Let’s start with a point I absolutely agree with. The current system, particularly around later life lending, is not credible in a 2025 market.
You cannot have a situation where some advisers can only offer part of the picture to older borrowers. Customers aged 55 and over should always be presented with the full suite of options – from mainstream repayment or retirement interest-only (RIO), right through to equity release or hybrid solutions.
That’s why I would support a mandatory qualification for all advisers that allows them to advise on all mortgage options available to older clients, indeed all clients. This could be in the form of an enhanced CeMAP or Advanced CeMAP – call it what you like – but it must unify the mainstream and later life pathways. I also think advisers will buy into this, because most want to deliver the right advice, they just need a framework that empowers, not restricts.
If that is the direction of travel, then we shouldn’t really be separating other sectors out as is already the case with equity release. Especially when those are already core areas of day-to-day advice.
Most advisers already deal with these clients – it’s the job. It’s the bread and butter. Saying advisers need a separate qualification to help someone with a high LTV mortgage is like telling a baker they can bake bread but not hot cross buns.
The FCA has to be careful here. If the message is that the current qualification standard isn’t fit for purpose, well fair enough. Let’s update it. Let’s build a more robust, advanced qualification that covers every single area, not separate them out, potentially restricting advisers from areas of their core market that they’ve served professionally for decades.
We’re at a natural inflection point. The mortgage market is evolving. Borrowers are more diverse, borrowing for longer, needing more complex solutions. The advice framework should evolve too.
So why not combine these two ideas? Introduce a mandatory updated qualification that every adviser must have (e.g. Advanced CeMAP), designed to cover all the areas the FCA is worried about. Use this to eliminate silos – both the later life divide and any potential new product-based ‘enhanced advice’ grey zone. Make it clear: every adviser should be able to advise on all of this.
The mortgage advice community is not against raising standards. But we are wary of regulatory creep that unintentionally restricts access or builds new barriers. Get the qualification framework right, and you solve both the quality challenge and the access challenge. But don’t carve up the market into new silos while trying to fix the old ones.
