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Will the new mortgage qualification open the door to higher standards?

To say a concerted effort has been made to increase professionalism in financial services is an understatement. Regulation, through the RDR and Mortgage Market Review, has played a huge part in driving up standards. 

But there is a school of thought that pushing beyond the minimum requirements voluntarily also brings about improvements and this is where the Chartered Institute of Insurance is coming from with its new level four mortgage qualification.

From this month, mortgage advisers and people working in support roles within the mortgage industry can take the exam for the Certificate in Advanced Mortgage Advice. Its launch coincides with the relaunch of the Society of Mortgage Professionals, which is tasked with supporting professional development within the industry and raising awareness among consumers of the benefits of advice.

Going beyond the FCA’s minimum standard of level three to bring mortgage advisers in line with their peers in other areas of financial advice, the exam can be taken online, with results provided immediately. Candidates who hold the CII level three Certificate in Mortgage Advice have just one module, RO7, to complete. Those who are not already qualified to level three must also take a financial services module, plus a regulation and ethics exam.

Society of Mortgage Professionals head of operations and membership Gary Little says the mortgage market is calling for an increase in professional standards but without further regulatory intervention.

“There is an appetite for increasing professional standards. We have seen that from our corporate development team who deal with corporate clients, calls into our customer service centre and a survey among our members. The MMR didn’t mandate an increase in qualification standards, so level three is the benchmark. But level four is a voluntary step up and a lot of mortgage advisers can do that – they want to qualify at the highest level.”

Little says as the mortgage market has changed so much in the last 10 years, the syllabus of the new exam is very different from advanced qualifications that were previously available. This means opportunities to gap-fill for advisers who did pass the previous exams are not possible.  “We now cover specialist areas of mortgage lending such as second charge and equity release, sub-prime and the securitisation process, distribution, affordability and the new regulatory requirements,” says Little. “The practitioners have created the syllabus for us – it has come from their peers and market feedback.”

Personal Touch head of commercial relationships Neil Hoare points out some independent advisers want to differentiate themselves from advisers in banks or their competitors. He says they can do this through service or the value for money they give customers. But more often, since the introduction of MMR, they distinguish themselves by the expertise they have.

“While the market is buoyant, advisers may see passing more exams as a distraction.  But in time advisers will see the value of developing mortgage knowledge and the additional letters on a business card will become seen as a badge of distinction,” he says.

Enterprise Finance chief executive Danny Waters also sees merit in taking the exam. “Understanding the uses of different products enables advisers to look at a client’s portfolio much more holistically. Any exam that builds a broker or adviser’s area of expertise will be welcomed with open arms.”

But Highclere Financial Services partner Alan Lakey has reservations. “The problem with improving qualifications is people often won’t do it voluntarily. Without a mandate by the FCA, it will never have that impact.” 

Adviser view

Aaron Strutt, product and communications manager at Trinity Financial


I’d imagine it would be good for raising standards. But the difficulty is the basic Certificate in Mortgage Advice and Practice is enough of a qualification to get you through and limited numbers are likely to choose to take even more exams. Then again, if there are more exams inevitably that would help ongoing development – there is a lot of compliance with ongoing training and knowledge. Overall it’s a good idea but it’s likely to be more popular with people coming into the industry rather than those who have been around a long time. 


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Whilst a good idea and I personally welcome the concept, are we in danger of having the equivalent of a Barrister completing simple conveyancing work. The increased qualifications will have to come at a cost to the consumer.

    It is a proven fact that qualification do not instill the main ingredient that makes a good adviser, be it mortgage or CF30 and that is ethics.

  2. Our Esteemed Regulator deems that current Level 3 qualifications are sufficient to meet the standard required when serving and advising clients. In coming up with the idea of a qualification that goes beyond regulatory requirements, I feel this is a CII ‘revenue generation exercise’, now that the CF4 revenue Gravy Train has departed. It’s not about what they can do for you – it’s more about what you can do for them by providing the CII with an additional revenue stream.

  3. Michael.White.BoutiqueCapital - Bridging Loans 2nd October 2014 at 5:04 pm

    I read recently that a significant percentage of borrowers think SVR is a fixed rate… Were they told to the contrary?. Yes, of course. Did they receive a rainforest of KFI paper to prove they had the most suitablle product? Yes. Will an improved qualification and more paper change matters? Of course not…..

  4. No one could argue that having well qualified advisers can only be beneficial to the client. However, this smacks of someone in an organisation with a ‘vested interest’ coming up with yet another idea to increase their revenue. The regulator thinks level 3 is adequate but I would bet a pound to a penny there is plenty of lobbying going on behind the scenes to persuade the FCA mortgage advisers need at least level four, and I bet my house there’s been plenty of discussions around investment advisers needing level 6. Not that anyone or any interested organisation would benefit financially from this happening of course.

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