Later life lending should be included in standard mortgage qualifications, according to Key Advice.
In its response to the Financial Conduct Authority’s (FCA) Future of the Mortgage Market Discussion Paper, Key said advisers need to make sure older borrowers know about all the borrowing options open to them.
The FCA’s paper asked how advice on later life lending could be improved and how rules could help borrowers get better support.
Key said joining together CeMAP, the qualification for mainstream mortgages, and CeRER, which covers equity release, would help tackle these issues and break down silos.
Key said all mortgage brokers need to be ready to help with later life lending.
They said a single qualification would mean advisers could consider every option for borrowers aged 55 and over.
Additionally, Key noted that it should be mandatory for continuous professional development (CPD) to include training on later life lending.
Key also noted that an updated qualification for the UK’s 37,000 mortgage advisers would help meet the FCA’s call for better advice.
Charlotte Allen, chief risk and compliance officer at Key Group, said: “Introducing a single qualification to advise on all types of mortgages, including later life lending, would ensure that those over 55 are offered the right options according to their circumstances and be a step towards removing the lottery of outcomes being determined by what type of adviser a customer happens to engage at outset.
“That is fully in line with Consumer Duty obligations and should be considered seriously as part of the FCA’s mortgage market discussion.
“All advisers must advise and not simply be order takers. Often customers come to advisers not having the information they need to be making informed decisions.”
Allen added: “Whether you are an equity release specialist or a mainstream adviser, not defaulting to one product type, not passively facilitating a re-mortgage or product transfer, considering all options and being prepared to challenge customers on their preconceptions should be part and parcel of the role.
“The current qualifications regime does not reflect how the product landscape and customer needs have evolved in the later life lending market.
“Customers are coming onto the property ladder later, mortgages often have longer terms and taking mortgage debt into later life is becoming the norm.”
She said: “All advisers should be able to talk to older customers about all the options available to them, even if some products are outside of the scope of the advice they wish to offer, and introducing a single qualification alongside industrialising referral mechanisms would be a positive step in breaking down the current silos and improving outcomes.”
