The launch has been planned to coincide with the introduction of more stringent Financial Services Authority (FSA) authorisation requirements to improve consumer protection.
New FSA rules come into force on 6 April which will require anyone advising consumers or overseeing the non-advised sales of home reversions to pass an appropriate exam. The CII has fast-tracked the development of this exam – which will be a top-up for those who already hold the CII's Lifetime mortgage activities unit – to deliver a timely market solution.
Richard Fox, chief executive of the Society of Mortgage Professionals, said: "It is essential that advisers who are qualified in lifetime mortgages ensure that they are also suitably skilled regarding home reversions. This is at the top of the regulatory agenda and firms will not be able to advise unless their people can demonstrate their competence; but it is incumbent on all advisers who are serious about giving their clients the best possible service to get their knowledge up to speed."
Home reversions are currently a small percentage of the equity release market, but Fox believed: "recent research is pointing to the reluctance of retired people to move voluntarily from their homes. Those who are asset-rich but cash-poor will be increasingly looking to home reversion plans as a way to generate income, so this market is set to grow. Advisers have to be prepared for this."
Advisers completing the CII's unit will need to demonstrate an understanding of the circumstances in which a home reversion plan might be appropriate and how these are influenced by consumers' preference and financial needs, the impact on consumers' future options, along with the key features of these plans and the alternatives.
The ability to analyse on the suitability, advantages, disadvantages and potential risks to consumers associated with taking out these plans will also be tested.
Study materials will be available in March and the exam will be available within the CII's online/on demand suite of examinations at centres throughout the UK.
