The FSA has proposed that guidelines on training and competence previously set down for lenders will be extended to all firms which advise on or arrange mortgages.
The FSA has already set out its approach to training and compliance in the Training and Competence Sourcebook, which includes commitments to maintaining reasonable levels of responsibility and competence among individuals. In earlier consultations, the regulator concluded that only mortgage lenders and administrators should be subject to the commitment, but a widening of the scope of regulation has led them to reconsider.
The FSA says additional training and competence beyond the Sourcebook commitments will be required for advised sales on standard and higher risk mortgages and non-advised sales using filtered questions for higher risk mortgages.
In CP146 the FSA says: “For all advised sales except lower risk mortgages, we are proposing that the full training and competence regime, including an examination, is appropriate. It is particularly important in advised situations that the adviser is fully competent to undertake his role to ensure that the consumer receives advice on a mortgage that is suitable to his circumstances and is good value.”
For non-advised sales using both filtering questions and execution-only, the FSA propose that only the Commitments will apply, with the exception to equity release/lifetime mortgages. The FSA proposes that the supervisors of staff involved in non-advised lifetime mortgage sales and the individuals who design the filtering questions should have to meet the full training and competence requirements, including an examination.