More2life has set out its proposals to the Financial Conduct Authority’s mortgage guidelines assessment, saying that later life lending should drop its notion as being seen as “a product of final resort”.
The fairness launch lender highlights 5 areas “the place regulatory change is required.”
Removal of recommendation silos
The agency says: “The present separation of mainstream and later life mortgage recommendation below the Mortgage Conduct of Business rulebook implies that whether or not a client is proven all their choices could rely upon what kind of adviser they method. The lender believes that is unacceptable.”
The lender helps merging related guidelines “so each borrower over 55 receives holistic mortgage recommendation by default”.
Unifying adviser {qualifications}
The agency factors out: “The present requirement for a separate CERER qualification is outdated and reinforces obstacles.
The lender says the content material on this qualification needs to be absorbed into CeMAP “so all advisers have a baseline understanding of later life choices, whereas retaining the flexibility to refer instances the place essential”.
Providing clear regulatory steerage
It provides: “Lifetime mortgages are nonetheless typically seen as a ‘final resort’, regardless of vital product evolution.
“The FCA ought to challenge express good and poor apply steerage for later life lending, to construct confidence, scale back stigma and guarantee advisers can interact with these merchandise with out worry of regulatory censure.”
Mandating disclosure of choices
It says: “Later life debtors ought to by no means attain the tip of a mortgage time period with out being informed about later life options.”
The agency requires obligatory disclosure necessities on each lenders and advisers, so prospects are all the time made conscious of the alternatives accessible to them at key factors of their mortgage journey.
Supporting innovation
The agency argues: “Rule modifications are wanted to permit hybrid and versatile merchandise to achieve their goal markets, with present silos performing as a brake on growth and adoption.”
The lender’s feedback comply with the FCA closing the session interval on its wide-ranging paper final Friday.
The regulator’s paper identified that round £2.6tn, of the UK’s £9.1tn housing inventory, is owned by individuals over 65.
It added: “If older owners are capable of entry a few of this wealth, they are able to safe a extra comfy retirement.”
The watchdog stated it needs to verify its “guidelines should not making a barrier to innovation, and that corporations really feel assured when launching new choices”.
UK Finance stated earlier this week that it helps later life lending “turning into extra mainstream”.
More2life chief government Dave Harris (pictured) says: “Our expertise exhibits that when prospects are made conscious of lifetime mortgages, the outcomes are overwhelmingly constructive. “Drawdown and curiosity reward merchandise assist individuals handle borrowing prices and construct monetary resilience.
“Hybrid fashions can bridge the hole between mainstream and lifelong mortgages. Downsizing safety and voluntary repayments give individuals flexibility.
Harris provides: “These options are already right here. What is lacking is the regulatory framework to make sure extra individuals can entry them.
“Lifetime mortgages should not a product of final resort. They are serving to prospects repay debt, keep of their properties, adapt their properties, and help their youngsters and grandchildren.”
