Update on Equity Release qualification and permission
Towards the close of 2016, the FCA released a Consultation Paper (CP16/24) looking at the possibility of investment and pension firms without mortgage permissions being able to advise on the equity release market provided they had an adviser who passed either a standalone qualification or a top-up to existing pension and investment qualifications.
- The FCA has decided not to change the qualifications for equity release at this time
- The FCA Consultation paper CP16/24 raised the possibility of investment and pension firms without mortgage permissions being able to advise on the equity release market
- The responses they received did not demonstrate a market need for a change to the appropriate qualification for equity release
However, the responses received by the regulator did not demonstrate a market need for a change to the appropriate qualification for equity release.
This means that ‘investment’ and ‘pension only’ firms will not have the opportunity to include equity release within their advice process and, should a client need arise, will still have to refer to another suitably qualified adviser.
The consultation also addressed the issue of whether it would be beneficial to develop an additional equity release qualification, as the FCA was being told that the current qualification structure might be a barrier to advisers becoming qualified, and so could be limiting consumers’ access to equity release products.
Summary of the feedback
The FCA received mixed feedback on whether there was a market need for a standalone or top-up equity release qualification. Most respondents did not think that an alternative to the current approach would lead to a significant increase in the number of people appropriately qualified, although respondents generally welcomed the aim for consumers to have greater access to equity release and the concept of holistic retirement advice. However, there was widespread acknowledgement around the difficulties in achieving this goal.
Personally, I believe that the issue around equity release permissions isn’t going to just disappear and this area in the market needs to be addressed. I am hopeful that the FCA will re-consider this at some point in the future in order to better equip advisers in providing the full remit of advice when it comes to their clients’ retirement.
Mark Greenwood is Group Regulatory Policy Manager at The SimplyBiz Group