The adviser community has offered broad support to the merits of a standalone equity release qualification, according to a joint survey carried out by the Society of Mortgage Professionals and the Personal Finance Society.
The organisations surveyed 1,000 members to gauge a feeling of opinion after the Financial Conduct Authority launched a consultation into the pros and cons of the proposed qualification.
Some 61% of respondents said they thought it should be a separate top-up to existing pension and investment qualifications.
Meanwhile, 77% think investment 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.
“The results show a clear appetite amongst advisers for a dedicated new qualification, to adequately reflect the recent rapid growth in the sector," said Vishal Pandya, operations manager at the Society of Mortgage Professionals.
“Our members would appear to agree with the FCA that the current structure of the existing equity release qualifications may be a barrier to a wider number of consumers wishing to access the product."
“Lifetime mortgages are the main form of financial product consumers use to release equity, so when the Appropriate Examination Standards (AES), for equity release were first developed it was natural to use an approach that built on an existing knowledge of mortgages. This reflected and reinforced mortgage brokers being the primary distributers of equity release products,” he explained.
“Our on-going work looking at competition in the UK mortgage market has confirmed that many stakeholders believe that some independent financial advisers may not be offering equity release because they need to be appropriately qualified for a product (mortgages), that otherwise they have no interest in selling.”
However, Pandya cautioned that although a standalone qualification could increase the number of advisers than can recommend the product in the long run.
This could become a concern if the advisers doing so were not suitably knowledgeable about conventional mortgages - given that they may not be level 3 mortgage qualified.
He also pointed out that any re-fashioning of content or decoupling of equity release from the mortgages unit would need to be designed with sufficient mortgage content in the equity release component, in order to guarantee proper levels of competence and the fair treatment of customers.
“This would be crucial due to the strong links between mortgages and equity release, particularly in respect of some of the newer mortgage products available to older borrowers,” he said.
“In the third quarter of last year alone, the value of equity release lending increased by 26 per cent year-on-year to £571.6m. It is no longer a niche market and the adviser community needs to reflect this by giving serious consideration to a new qualification.
“That being said, it seems unlikely that there would be an immediate surge in numbers in what is still deemed to be a specialist area with a relatively limited, albeit growing, market share.”