We will not add another broker exam, says FSA

7 June 2010 | By Natalie Thomas

The Financial Services Authority has confirmed to Mortgage Strategy that it will not be introducing more qualifications for mortgage brokers.

Last week the FSA released its consultation paper on competence and ethics in which it revealed that it is looking at the content of qualifications for non-Retail Distribution Review activities and whether these would benefit from reform.

In the paper the FSA states: “We do not have a view on the level of difficulty of the qualification that applies to existing activities outside of the RDR.”

It says there is a case for carrying out a risk-based review of remaining non-RDR-related examination standards to ensure they stay up-to-date and relevant.

The FSA adds: “We are aware that, at present, written examinations are the primary qualification assessment methodology but we can see no reason why we should not permit the use of other assessment methodologies for non-RDR activities.”

Katherine Leahman, manager of professional standards on the regulator’s policy team, says the FSA will be reviewing the content of exams every three years but not increasing the number of them.

She says: “We are not proposing extra qualifications for brokers but we are suggesting changes to the content of the existing exams which will make them more relevant to the current market.”

She adds that this does not mean that brokers will need to sit a new exam but in future the exam brokers take could be different from the one their colleagues took a few years earlier. And she can’t rule out the move increasing costs for brokers.Leahman adds: “The cost will depend on the qualification provider and if it wants to add more detail to the exam.”

The regulator is proposing a 30-month deadline for individuals to complete all modules of the qualification required for their role. It says this is not because there is evidence that brokers are taking longer to complete exams but because firms want more clarity.

In its paper the FSA also proposes that approved persons should demonstrate a good standard of ethical behaviour. This means firms will be expected to act in the interests of their clients, avoid consumer detriment and take responsibility for their level of competence.

But Andrew Strange, director of policy at the Association of Mortgage Intermediaries, says: “What we need is regulatory stability. The FSA has brought out this consultation paper before it has even brought in its approved persons guidelines.”

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