The reason for this is simple: I was curious to find out what exams advisers will have to take come Mortgage Day as while talking to a number of brokers and mortgage institutions it quickly became evident that there is still some confusion about what will actually happen.
For those who don't know, December 31 2002 was the deadline by which all mortgage advisers giving advice and recommendations should have passed CeMAP papers 1,2 and 3 or the MAQ/bridge paper.
After that date, unqualified individuals were not allowed to give advice and a recommendation unless under strict supervision. At least that was the plan.
Naturally, as I used to work for the Mortgage Code Compliance Board, my first port of call in seeking qualification clarification was to call Brad Baker, director of communications at that organisation. Baker gave me his interpretation of the nuts and bolts of grandfathering which cover CeMAP and MAQ qualifications in the transition from MCCB to FSA regulation. I was aware of a two-year interim period when CeMAP and MAQ would still be the recognised qualifications but was unaware, until Baker explained it to me, that the clock for this two-year period does not start ticking from Mortgage Day as many believe.
“The clock starts ticking from the day someone becomes a trainee under supervision with a company,” he told me. “This is because part of the package for qualifications acceptance is the requirement by the adviser to be competent with the processes the trainee's company implements.”
Baker's interpretation is backed up by the Financial Services Authority website which refers to the subject in not much detail but with straightforward terminology: 'examinations that must be passed within two years of starting the activity'. I was assured by the FSA that under the grand fathering agreement, both CeMAPs, the Institute of Financial Services qualification, and the Chartered Insurance Institute qualification, MAQ, will be recognised for two years after Mortgage Day.
“MAQ will continue to be recognised by the FSA after Mortgage Day even though we are in the process of renaming the qualification with the FSA in mind,” explains CII spokesman Steve Radford. “The last exam under the name of MAQ will be held on 12 October 2004 after which candidates will move to its replacement mortgages exam. The new examination will meet Financial Services Skills Council requirements and learning materials for the new exam will be available later in the year.” The first exam will be held in early 2005.
Paul Turner of the CII informs me that the new exam course will be called Certificate in Mortgage Advice and that there will be two papers. The first paper, the equivalent to FPC1 will be called UK Financial Services Regulation and Ethics and is a two-hour examination. The second paper is to be called Mortgage Advice and is to be a three-hour exam. The exams will both be a mixture of multi-choice and case scenarios.
My guess is that Richard Fox, currently compliance director at MCCB, will have some part in taking this forward as head of the newly-created CII's Society of Mortgage Professionals. More on the SMP in future issues.
Unfortunately, just when I thought everyone was drinking nicely at the same oasis, the water was muddied by the IFS when it stated on no less than two occasions that the it had not received an official date from the FSA when CeMAP will cease to be recognised. I'm convinced that Baker, the FSA and Radford have got it right when they say there will be a two-year period of grace after Mortgage Day as explained above.
I hope this has clarified the qualification debate for you and that you have been motivated to continue studying to take CeMAP or MAQ.
Next week's article will offer guidance on becoming qualified with less effort and in less time than you thought was possible. Two advisers testify to course notes that have enabled them pass their mortgage exam with relative ease. You won't want to miss what they have to say about the notes and you can hear from the notes' author himself in next week's column.
Despite alleged governmental discussions on the introduction of VAT on houses, the impending introduction of HIPs and looming FSA regulation, the mortgage industry has a rosy future.
Make sure you're a part of it – get qualified.