FCA rules out standalone equity release qualification

Ryan Bembridge

May 9, 2017

The Financial Conduct Authority has ruled out implementing a standalone equity release qualification.

The FCA introduced the idea last September in a bid to get more advisers qualified.

But in a policy statement published today, the FCA wrote: “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.

Frankfurt and the City

“Therefore, we have decided not to change the appropriate qualification for equity release at this time.”

The industry was split on whether the regulator has made the right call.

Nigel Waterson, chairman of the Equity Release Council, said: “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.”

But Alice Watson, head of marketing at Retirement Advantage Equity Release, said: “The FCA’s decision represents a missed opportunity to get more advisers qualified to offer equity release as a potential stream of income for people in or approaching retirement.

She added: “Most people recognise that their properties are worth more than their pensions.

“As such, there is an increased need for more qualified advisers to meet not just the growing demand for equity release, but also to ensure that those who haven’t considered how their property can boost their retirement finances are introduced to this possibility.

“The FCA may have decided against a standalone equity release qualification, but it is vital that it continues to work with the industry to improve the current qualification system.

“As more and more people turn to equity release as part of a holistic approach to retirement planning, a bigger cohort of advisers qualified to offer it to customers is essential.”

Andrea Rozario, chief corporate officer at Bower Retirement, said: “It is disappointing as creating a comprehensive standalone qualification would have been a great message to the market highlighting that the FCA recognises equity release’s significant role in helping to finance retirement planning.

“Customers need advisers with the skills and capability to explain retirement planning options thoroughly and that should include equity release specialists.

“Equity release is different to mainstream mortgage planning requiring different skill sets and the styles of advice in equity release and the mortgage market are very different and whilst general mortgage knowledge should be part of this exam there are a plethora of other requirements which could have been encompassed by a standalone exam.”

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