The Financial Conduct Authority (FCA) has ruled out introducing a standalone equity release qualification or docking the existing top-up one onto pensions or investments, as previously proposed.
In a policy statement on examination standards published on 9 May, the FCA concluded that the responses it received from its September consultation "did not demonstrate a market need for a change to the appropriate qualification for equity release".
The regulator had floated the idea of a new qualification last September, saying the way equity release qualifications were currently linked to mortgages meant some advisers were turning their backs on the product. This meant consumer access to equity release was limited, leading to less competition in the market.
The regulator had received 18 mixed responses from lenders, intermediaries, trade bodies and qualification providers.
While respondents generally welcomed greater consumers access to equity release, they acknowledged the difficulties in achieving this through a new qualification.
Some told the FCA there were greater barriers to entry into this particular market for pension and investment firms than the current structure of the equity release qualification.
Besides, plenty of advisers were already qualified in equity release but were not selling the products, which suggested increasing the number of qualified advisers would not necessarily increase access to advice on equity release, they said.
Two respondents thought a change to the qualification would lead to a significant increase in the number of people appropriately qualified, while several others anticipated a small and gradual increase in the number of advisers qualified for equity release.
Another respondent told the FCA that because the main equity release product was a lifetime mortgage, firms may require a mortgage qualification for their advisers working in equity release, even if the FCA rules did not.
Bower Retirement Services chief corporate officer Andrea Rozario had already warned a new equity release qualification would not solve the advice issue in this market last September.
While an additional qualification may attract more advisers to the market, it would not automatically mean they do more business, she said.
She described the regulator's decision as disappointing, adding: "Creating a comprehensive standalone qualification would have been a great message to the market, highlighting that the FCA recognises equity release's significant role in helping to finance retirement planning.
"Customers need advisers with the skills and capability to explain retirement planning options thoroughly and that should include equity release specialists."
Consolidating ethics standards
Meanwhile, the regulator has decided to reduce the number of regulation and ethics exam standards from three to two.
As a result, ApEx8 will be withdrawn and two regulation and ethics exam standards will be used in the future: One will apply to Retail Distribution Review (RDR) level 4 qualifications, and the other to non-RDR regulated activities that have level three appropriate requirements.
Finally, the FCA has updated its broader AES standards, which can now be viewed on its examination standards homepage.
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