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Year of living dangerously

Amid the recent barrage of new regulation, IFAs have found it hard to decide which way to turn. As many concentrate on shaping up for the launch of stakeholder and obtaining the G60 pension qualification, mortgage exams have taken a back seat.

But the Mortgage Code Compliance Board is demanding that all advisers hold the Certificate in Mortgage Advice and Practice or the Mortgage Advice Qualification and is urging them not to leave it to the 11th hour.

Uncertainty over the FSA&#39s involvement in mortgage regulation has delayed the deadline for passing the exams but the MCCB says a preferred time would be somewhere in mid-2001, leaving only one year for IFAs to qualify.

In addition to the Financial Planning Certificate, advisers will now need to obtain a specialist mortgage qualification that recognises the importance of con- sumer confidence and raising industry standards.

The Mortgage Advice Qualification was launched by the Chartered Insurance Instit-ute in October 1998. It is a stand-alone qualification that is open to anyone. The exam last three hours and consists of 50 multiple-choice questions and two case studies.

The Certificate in Mortgage Advice and Practice, recommended by the Council of Mortgage Lenders, was developed by the Chartered Institute of Bankers. It consists of three exam papers but a bridge paper is offered to those holding the FPC or Cefa qualifications.

The Cemap bridge paper takes into account a prior knowledge of legislation, regulation, enforcement, compliance and generic financial services issues, all of which are also taken into consideration in the content of the Maq exam.

Both Maq and Cemap meet the requirements of the CML and allow successful candidates to advise on mortgages.

The MCCB estimates there are around 70,000 brokers and intermediaries in the UK who could take the exams.

However, the CII says only 3,300 candidates have ent-ered for its exam, with around 2,050 passes.

The CIB says it had received 28,000 registrations by August, of which 10,000 were for the bridge paper. So far, 11,000 candidates have passed.

This leaves a gap of nearly 40,000 advisers who have not even registered to sit the exams. With the possibility of there only being a year to go before the deadline, examiners could face a last-minute dash, reminiscent of the rush to obtain the FPC in 1997.

Both examining bodies claim they are prepared to arrange extra sittings and provide bigger venues. CII divisional director of marketing Freddie Hospedales says: “Hopefully, people have learnt from the experience of the FPC rush and are planning ahead to get themselves through.

“The luxury we have is that we have been through the FPC experience and know we can cope with the deadline and with large numbers of people going through the exam in a confined period of time, so it should not be a problem.”

Rachel Gosling, director of marketing at the Institute of Financial Services, a subsidiary of the CIB, warns that although extra exam sittings will be laid on, there is a limit to the number of written papers it can produce. She says: “If we had an exam a week, it would compromise the quality of the questions and the exam&#39s reputation.”

IFAs welcome the introduction of the exams, saying it is easy to assume the mortgage market is straightforward since there have not been massive changes in regulation.

They say that exams and qualifications ensure that IFAs understand the products they are offering and provide reassurance to borrowers about the standard of advice.

Cardiff-based IFA Chambers Morgan James director Marlene Shalton says: “We believe in getting the qualification so that we can show to the public we have reached a certain standard. It is important as they see it as a benchmark.”

Franklins Financial Services senior financial consultant Alan Tyley says: “It makes sense to have the market controlled. Ultimately, it is good news for advisers.”

It is easy for advisers to dismiss the exams due to lack of time or lack of mortgage business. But by not obtaining a qualification, they will not be able to advise on mortgages, shutting off a valuable area of business.

Sitting exams may mean taking time away from writing new business but being qualified and knowing what you are doing is essential.

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