I am on record as saying that I believe that degree-level courses in financial services, provided at various colleges and universities, help new entrants to the industry gain a clearer picture of their preferred career path. It is a view I have often repeated. I also believe these courses turn out academically-qualified individuals with broad financial services knowledge. The issue is, of course, that many of these able graduates are not ready to come face-to-face with real clients.
Of course, the same can be said of all new advisers, but there is a difference between mortgage and financial advisers. In the commercial world, financial advisers have the opportunity to study for a wide variety of different general and specialist qualifications. As a mortgage adviser though, the choice of qualifications is much more limited. Indeed, MAQ, CeMAP and the more recently introduced lifetime qualification, pretty much represent the entirety of the qualifications on offer. The first two, MAQ and CeMAP are very similar (although they are run by different exam boards), whilst the lifetime qualification is – in my opinion – of questionable value at the moment.
Developing careers
However, the extent of the qualifications on offer isn’t the only difference facing mortgage and financial advisers as they look to develop their own careers. Most IFA firms will insist that advisers have 12 months’ immediate and relevant experience before they are let loose to advise unsuspecting members of the great British public. The same, however, cannot generally be said about mortgage advisers. In many cases, passing a qualification is all it takes. Surely, it is an anathema that obtaining enough marks in an examination is all that is required to enable an individual to advise the great and the good about what is typically one of the biggest purchases of their lives. Taking a leaf out of the financial advisers’ book and insisting on immediate and relevant experience might be worth consideration.
While similar in many respects, the roles of the mortgage adviser and the financial advisers are actually very different. I believe it is fair to argue that learning about life and investment products is an easier proposition than understanding the minutiae of the mortgage market. After all, researching the right choice of life or investment products – most of which are driven by price or asset allocation – mainly results in a black and white decision.
The decision for the mortgage adviser, on the other hand, typically involves many more shades of grey. I am not saying that other areas of financial advice are easier to advise on, merely that the research tends to be based on price, charges and in the case of investment, asset allocation guidelines with certain fundamentals remaining the same, like the client risk profile.
A good starting point
Mortgage advisers need to understand the attitudes of providers and lenders, for example, the acceptance of greater than the published salary multiples or the likelihood of the offer of a more beneficial rate. Such knowledge cannot be gleaned from study notes or from the classroom situation. Mortgage sourcing tools are not and cannot be exhaustive – there is no substitute for real experience.
The specialist mortgage areas of non-conforming, buy-to-let and lifetime mortgages – which bear little resemblance to traditional mortgages – present even greater problems. Advising on these based purely on knowledge and without real experience arguably puts the client at greater risk of being badly advised.
The answer surely lies in a move towards a more rigid and rigorous approach to the development of mortgage advisers. A greater variety of mortgage qualifications and an improvement in their standard. I have been, frankly, very disappointed in the quality of mortgage advisers I have come across since regulation was introduced – many see regulation as an inconvenience rather than an important part of the sales process that should be understood and embraced. As a result I feel that if newly qualified advisers were accompanied by the need for 12 months’ immediate and relevant experience this would be a good starting point.
