The industry association has established a course to ensure that finance and mortgage brokers are sufficiently educated on reverse mortgages and equity release products.
The Seniors Equity Release / Reverse Mortgage Course is an industry-wide online training course that is being offered through the AAMC Training Group and is approved by the Finance Brokers Association of Australia (FBAA) and others across the industry.
While the course will be mandatory for FBAA members involved with this product, the association has encouraged all brokers to participate.
There are three modules in the course, including equity release fundamentals, equity release products explored, and reverse mortgage application and sales processes. It also includes three online multi-choice assessments.
The enrolment in the course is valid for 12 months, while the course counts for three CPD points.
According to the FBAA, the decision to establish the course was prompted by the updates to the Banking Code of Practice by the Australian Banking Association (ABA), which was approved by the Australian Securities and Investments Commission (ASIC).
FBAA managing director Peter White noted that the new code has increased its focus on vulnerable borrowers through financial abuse and, in particular, elder abuse, adding that training and education has become vital to the industry’s “integrity” in this area.
“The broking sector needs to lead the way in this product, which is only going to increase in exposure and demand as people live longer and our population ages,” Mr White said.
The FBAA believes that there have been inconsistencies in the standards of various training and accreditation courses for loan writers operating in this space, especially since the collapse of the previous equity release training provider, Sequal.
The requirement for training was identified as part of an industry working group convened by ASIC following the release of its 2018 review into reverse mortgage lending (REP 586).
The FBAA said that it was requested to coordinate a review of training in this sector, after which it provided ASIC with its conclusions and a course structure recommendation.
This has now been adopted by those in the industry, it added.
The work was undertaken by FBAA’s Equity Release Industry Advisory committee, chaired by FBAA director Stephen Rasmussen.
The committee membership includes all major reverse mortgage and aged care lenders, equity release provider Homesafe, specialist reverse mortgage brokers, and AAMC.
Commenting on the course, Mr Rasmussen said that in formulating the framework and the course, the committee considered the fact that reverse mortgage lending is a very specific and specialised credit area.
“With the impending growth in consumer demand as well as the recent entry of new lenders to this sector, it is timely that an appropriately robust and comprehensive training course be available,” he said.
“Further, we have designed it with not only brokers in mind. It is a course that is equally appropriate and valuable for all relevant staff of reverse mortgage lenders to undertake.”
Heartland Seniors Finance, which recently announced a long-term funding deal to enhance its Australian reverse mortgage business, contributed to the development of the course.
Speaking about the course, head of operations Sharon Yardley said: “We are very supportive of education that encourages mortgage brokers to be well informed on equity release.”
Paul Dwyer, broker at Reverse Mortgage Financial Solutions, who helped build the program, said the course is a positive step forward.
“While reverse mortgages generally do not have implications for age pension entitlements, a discussion now includes a consideration of any potential effect, and the capacity to fund any future needs, including aged care,” he said.
Darren Moffat, CEO of Seniors First who was also involved in the development of the course, said: “This course will ensure that brokers continue to provide credit advice that is fit for purpose.”
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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