Transcript Document

Training
A presentation on behalf of the
institute of financial services
FSA warns advisers that unsuitable
equity release advice has got to stop
(FSA Press release24/05/05)
Clive Briault
“ Our work has found another
disappointing instance of many
advisers giving poor quality
advice”
Regulations covering Lifetime
Mortgages
• MCOB 8. Lifetime Mortgages and
Selling Standards.
• MCOB 9. Lifetime Mortgages: Product
Disclosure.
Training & Competence
Sourcebook
The activities are:
• 1 advising on standard mortgages
• 2 advising on lifetime mortgages
• 3 supervising sales staff carrying out
non-advised lifetime
mortgage sales, and
• 4 designing scripted questions for use
in non-advised lifetime
mortgage sales.
Transitional arrangements for
the sale of mortgages
• Transitional arrangements will deal with
any interim period between 31st
October 2004 and the new examination
arrangements taking effect.
• The FSA intends to ‘grandfather’ for T &
C purposes, advisers who have already
met the MCCB’s F & C requirements.
Ask yourself five questions!
• Do I know enough about means tested
benefits?
• Would the creation of a mortgage mean that
client would lose an Age
• Allowance benefit?
• Could I prove I know the answers to these
questions?
• Could I prove I have checked these for that
client?
• Do my advisers know the answers to these
questions?
Ask yourself three questions!
• Do I know about local authority
grants?
• Do I know about local authority grants
in other geographical locations?
• What is the difference between a
home reversion scheme and a lifetime
mortgage or are they the same?
The personal client considerations are
different, for example the regulations
also require firms to take into
consideration, and evidence that they
have, the following :
• future intentions for estate distribution
• customer state of health and life
expectancy
• full knowledge of the lifetime
mortgages available to the firm and the
trade bodies which represent this
sector of the market
Appropriate examinations
• Instead of their being approved
examinations (i.e. CeMAP, MAQ, &
CIOBS) as in the past, firms’ will be
identifying and using appropriate
qualifications in deciding the best
standards for their staff and their
business.
• The Skills Council for Financial
Services) will maintain a suitable list of
qualifications.
National Qualifications & Standards Framework
International
Standards for
Financial
Planning (ISO)
Derivatives Corporate
finance
Investment
mgmnt
Pension
transfer
specialist
Retirement
planning
Securities
Broker
fund
adviser
Taxation
planning
Trusts
planning
Protection
Long term Lifetime/
Corporate Employee
care
Mortgages business benefits
Advice skills
Investments
and risks
Fin. environ
regulation
and ethics
Foundation Skills, e.g.. Customer Service, ICT
Introduction to Financial Services
Mini
Mini
Mini
Mini
Formal learning
Lifelong learning
Schools / Colleges /
Consumer Education
Universities
= For an IFA
= Other options, some not reviewed
+
= focus of Stage 2 of Review
FSSC appropriate qualification
suppliers
Appropriate Examination
Standards
■ CeMAP®/CeMAP® Bridge (or
equivalent);
■ the Investments and Risks module from
CeFA® (or equivalent); plus
■ the ifs Certificate in Lifetime Mortgages.
Aims and objectives
■ the advice process;
■ the UK finance industry and the
regulatory
and ethical framework for giving lifetime
mortgage advice;
■ different types of equity release solution
and the criteria for determining their
suitability and affordability.
Learning outcomes
■ Demonstrate knowledge of the definition
of a lifetime mortgage.
■ Demonstrate an understanding of:
■ the principles of equity release, the
types of equity release schemes
available and the applications for which
such schemes might be appropriate;
■ the types of borrower at whom lifetime
mortgages are targeted and their
particular requirements (both personal
and financial);
Learning outcomes continued
■ the circumstances where equity release
may be appropriate and how these
influence the borrower’s purpose(s).
■ what happens when the borrower dies
or goes into long term care, the type of
advice that may be appropriate and
when to offer such advice;
■ the key features, relative benefits and
risks of lifetime mortgages and the
principal products and services that are
alternatives to lifetime mortgages.
Learning outcomes continued
■ Demonstrate an ability to analyse:
■ the suitability and affordability of the
different types of lifetime mortgage
products and their principal
alternatives.for different types of
borrower.
■ Demonstrate an ability to assess:
■ the risks to consumers associated with
taking out equity release, and when
these might arise;
Learning outcomes continued
■ the relative levels of risk for different
consumers taking account of the
relevant factors.
■ Demonstrate an ability to apply:
■ the rules relating to state benefits to
provide appropriate advice to
consumers regarding a potential loss in
entitlement due to an increase in
income or capital, including how these
may vary by Local Authority.
Certificate in Lifetime Mortgages
• A Single Module
• 50 to 60 hours of learning
• Two hour multi choice exam using both
single choice and case studies
• Electronic assessment at one of 150
Pearson locations in the UK
• Immediate results and feedback
• Cost of the module £105 to include
materials and assessment
Additional study support
• Shadow papers can be purchased for
£10.
For further information or to order
material please contact Customer and
StudentServices on 01227 818609.
• Visit our website at www.ifslearning.com
Financial Services
Consumer Panel press
release of 24/05/05
Ann Foster , Chairman of the Consumer Panel
said:
"Equity release is targeted at a particularly
vulnerable group of consumers who are heavily
dependent on receiving good advice – the
consequences of receiving bad advice are far
reaching and can lead to considerable problems in
old age. These are damning results for those
advising on equity release. We call on the FSA to
take strong follow up action to make sure that they
carry out their statutory duty to protect consumers
of financial services in the area of equity release."