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Mortgage brokers may need new qualifications

The FSA has announced it is considering carrying out a risk-based review of exam standards for business that does not fall under the RDR, meaning mortgage brokers may be required to update their qualifications.

The FSA has today published proposals to strengthen its competence requirements.

The regulator says it is looking at the content of qualifications for non-RDR activities and whether these would benefit from reform, including mortgage advice, equity release, long -term care insurance and pension transfers.

The FSA says it will consider the introduction of alternative assessments for non-RDR activities and plans to update examination standards every three years.

The FSA states: “We do not have a view on the level of difficulty of the qualification required or indeed the level of difficulty of the current qualification that applies to existing activities outside of the RDR.

“However, we are primarily concerned with ensuring that any qualification is fit for purpose and areas examined cover the actual activities and skills necessary to perform the associated role.”

The FSA says it has not sought evidence of market failure that will support a review of these exam standards, but its research suggests that firms believe the existing content of qualifications does not accurately reflect the role individuals are performing.

The FSA says: “We believe there is a case for carrying out a risk based review of the remaining non-RDR related appropriate examination standards to ensure they remain up to date and relevant.

“We also are aware that, at present, written examinations are the primary qualification assessment methodology used but we can see no reason why we should not permit use of other assessment methodologies for non-RDR activities.”


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There are 20 comments at the moment, we would love to hear your opinion too.

  1. Excellent News for the fat cats at the FSA and at least it keeps the Training industry in business. Come on FSA you are killing the industry. Perhaps the FSA should review its own failings first.

  2. While we are at it can we have a minmum qualification for MP’s seeing as they are the ones who leave all the mess for the rest of us!

  3. Fit for Purpose – FSA – Conflict?

  4. Are we going to be in the same position as before where we have taken appropriate exams in Mortgages, Equity Release, Home Reversion and Long Term Care and some idiot declares that they are not acceptable and not worth the paper they are written on. Having taken many exams on various subjects I am getting p…..d off that they are now declared worthless. Can someone explain to me therefore why I wasted my time trying to keep up to date.

  5. By golly what efficient “research” by the FSA. They believe they’ve found a cash cow and oh boy do they intend to milk it.
    I recall reading earlier this week that there are hundreds of people at the FSA earning over £100,000pa.
    Justify that!!

  6. Alastair Clarke 4th June 2010 at 12:11 pm

    All of us transacting mortgages have already taken and passed exams. I transact Protection business and B & C, which are all regulated to hell currently. They need to get a grip on the really dangerous business-Banks/Lenders and those handling client moneys rather than trying to prove their use in this area.

  7. Roddy McKenzie 4th June 2010 at 12:19 pm

    Can anybody (please ensure brain is in gear first) tell me of ANY other profession where this is mandatory? CPD yes but here we are doing CPD AND being re-examined. And why? For no real reason apart from the one that it gives some people highly paid jobs for which we are paying.
    Come lets get real here the FSA are OUR employees not the other way round!!!Strange it is to have an employee that earns several times what I do.
    Wouldn’t stand scrutiny in business so why does it when it is unaccountable?
    Why can’t they just come out with it and ban us all? It’s what they are trying to do after all. Go on cut to the chase. At least it would be an honest way of dealing with things.

  8. As a person who deal with purely mortgage brokers for a while I have to say that this is good news. I doubt if I came across half a dozen out of the hundreds I dealt with in sub prime that I would trust to a family member.

    The industry must stop knocking the wealth management side and turning a blind eye to a group of people whi are simply making ‘a bit on the side’ to other activities.

  9. Surely the issues of poor advice come from the high street branch network where half the advisers dont have and dont need the CeMAP and associated qualifications to sell. Perhaps this is the area the FSA should be focusing on and not the qualified consultant offering wider, and dare I say it, far superior advice.

  10. So when will they be introducing new exams to work at the FSA?? Or not needed for £100k pa?
    I’m guessing they would say something like”The FSA says it has not sought evidence of market failure that will support a review of these exam standards”
    Lucky for them after the banking fiasco!
    Perhaps they should take a hard look in the mirror. Just a thought.

  11. What ever made you think that the FSA would be happy with the first round of exams after all the FSA is a cancer and its growth and requirements are exponential irrespective of the terminal decline of its victim! The more you give to this bully the greater the kicking you get. one day – perhaps before its is too late, the industry will stand up and fight back.

  12. Linda Abernethy 4th June 2010 at 12:37 pm

    Again the FSA wishing to make more money! This is an absolute disgrace. I think mortgage advisors have completed enough exams. Go thorugh strict compliance, having to justify every sale and not only that but Mystery Shops. When is all this crap going to STOP.

  13. Exams for what? They have decimated the mortgage business with straight jacket regulations, where existing clients cannot remortgage. Clients with high deposits cannot apply as income requiremnets are stringent. The housing market will remain slow, affecting the other trades and the economy. Good to keep mortgage brokers busy doing exams!

  14. Macbool Wahid 4th June 2010 at 2:29 pm

    I have been doing Mortgages for the last 12 years and seen good times and armaggedon!! the fact that most advisors are C-Map and FPC what more do we need to learn when 90% of all products are no longer there there is more compliance and less choice and to top it all off some jobsworth how is being paid bucket fulls of money to justifie his JOB!!! QUALIFACATIONS DONT PAY BILLS PEOPLE BUY PEOPLE. need i say any more!!! Only 2% of all complaints are against IFA’s come on FSA wake up and smell the coffee or get out! were else in this world do you have to send a non sales letter to a client imagine working in Jaguar and telling your cusotmer to go buy a Skoda beocuse some one doesnt think you are responsible enough!!

  15. I absolutely agree with the FSA’s stance on the issue. Mortgage intermediaries are the poor cousins to their IFA brethren yet deal with increasingly complex high value products. The bare minimum standard should be Advanced CeMAP yet a ridiculously low number of intermediaries put themselves through it. Existing Equity Release exams fall way below the standards of those specialist practicing in this area & need to be brought up to a more advanced level, to include a demonstrable understanding of powers of attorney, trusts & taxation.

  16. Steven Balmer 4th June 2010 at 3:24 pm

    Personally I couldn’t care less about sitting another mortgage exam, I know my job very well. Just another pointless exercise. The complications arising when arranging mortgages are seldom to do with anything that can be tested for. It is primarily down to ever changing lending criteria.
    It would be beneficial to the public if when a bank refuses a borrower, the borrower is encouraged seek independent advice. This almost never happens in practice. By making banks prove their measures it would encourage banks to lend first time, improve Independent Broker Status and assist the public with what they want – to borrow.
    The FSA say they have no view on difficulty of exams but in reality I do not expect they have much of a view on arranging non-RDR activities full stop.

  17. As a specialist in mortgages for 30+ yrs, what is the point of more exams other than to swell the pockets of FSA and CII. The changes to mortgages over the years are with lenders criteria which does not need an exam to be compliant. The research and sourcing for the client is the same as ever albeit with more technology to help. As an IFA the FSA have won as I have no wish to go through RDR but it seems they don’t want me as a Mortgage Broker either. TCF must be the next target to go, as it won’t work with just the banks giving advise!!! Oh for a lottery win!

  18. Here we go again…mortgage brokers complaining about the FSA.

    Although understanding you do a job and to take an exam is added work, just look at what IFAs are going through.

    Simon Chalk is spot on!

    Mortgage brokers who didn’t have the balls to charge fees for advice and relied on commission from product sales have only themselves to blame.

    Isn’t it shocking that over the last few months lenders have had direct offers which are far better than broker products….yet we have seen a vast increase in broker sales. Absolutely shocking!!

    Those who have refused to charge fees for their expertise have created a mindset in clients that they ought not to pay for advice. You fellas have only yourselves to blame for the business downturn and the need of the FSA to stamp out weak professionals.

  19. Nick Battersby 7th June 2010 at 4:57 pm

    CP 10/12 in my opinion completely misses the point on non advised mortgage sales. Far too many firms that currently adopt an advisory level of service to clients will see this as a reason to move to a far less onerous level of service, where the requirement for a professional examination doesn’t exist. I thought the FSA had already determined as part of their MMR that they would be strengthening the requirements fo non advised sales, why therefore does CP10/12 not address this issue?

  20. I’m so disappointed with the remarks my colleagues in the industry are making in reference to the FSA. Have they forgotten that they must only be referred to as DONKEYS!!
    Please maintain the campaign to rightly refer to them as donkeys at all times. After all they earn as much. I recently paid £10 for my 3 kids to have 100 metre donkey ride at the beach. That’s about £200k pa I reckon. Same level; of income including the trail of s**t they leave behind.

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