Is A Financial Adviser The Same As A Mortgage Adviser?

If you are starting to look for a mortgage, you might have seen two important terms: mortgage advisor and mortgage financial advisor. But what’s the difference and what does this mean for you?

To provide mortgage advice in the UK, the adviser will need to have passed all three Certificate in Mortgage Advice and Practice (CeMAP) exams, or have passed the Chartered Insurance Institute’s (CII) equivalent Certificate in Mortgage Advice qualification.

A financial adviser does not need to complete the last two modules of the CeMAP qualification.

In this article, we explain all the differences between a financial adviser and mortgage adviser, so that by the end, you will know which expert is best placed to help you. Let’s jump in.

What do Financial Advisers do?

Financial Advisers help individuals make informed decisions about their money by offering tailored financial advice. Their goal is to support clients in achieving short-term goals and long-term financial security through personalised recommendations. This can cover a wide range of financial areas, including:

• Investments
• Pensions
• Borrowing
• Insurance
• General money management

Most notably, mortgages will not usually be part and parcel of a financial adviser’s repertoire.

This is because, to become a financial adviser in the UK you need to have at minimum a qualification known as the Diploma for Financial Advisers (DipFA). By having the DipFA qualification you have also passed the requirement for the first module of mortgage advice (CeMAP module 1).

With that said, should a financial adviser wants to give mortgage advice, they will still need to pass CeMAP module 2 and 3 or the equivalent CII qualification. Some financial advisers opt not to take the additional qualification, preferring on other financial sectors and products, with some examples listed above.

In short: A financial adviser may or may not be qualified to give mortgage advice and if you approach one for mortgage help you should ensure they hold the CeMAP or CII equivalent qualification.

What do Mortgage Advisers do?

Mortgage Advisers specialise in helping people find and apply for the right mortgage products based on their financial situation and property goals. They typically hold a CeMAP qualification – a professional qualification that allows them to offer regulated mortgage advice. While some may have a DipFA, most focus only on mortgages and related products. They help clients from the first affordability checks to getting a mortgage offer.

A mortgage adviser has expertise in:

• Mortgages
• Bridging Finance
• Protection Insurance (Life Insurance)
• Home Insurance

Two other qualifications your mortgage adviser may also have, in addition to the CeMAP, is a CII and Equity Release qualification.

CII Qualification

The Chartered Insurance Institute provides a qualification for advisers who want to add the full range of insurance services to their skillset.

A CII qualification is not needed to arrange almost all insurance polices, however, if someone holds this qualification they are able to work more extensively within the insurance industry.

Notably, CII advisers can help:

• Arrange insurance policies
• Work for an insurer as an underwriter
• Claims handling and management

In truth, for most people looking into securing a mortgage this isn’t something that you need to be concerned with; it is simply something your adviser may mention to you as a qualification they hold.

To summarise: An adviser does not need a CII to arrange insurance policies. Rather, the qualification is mainly used by individuals who’re interested in policy management behind the scenes such as claims and underwriting.

Equity Release Advice and Qualification

A financial adviser or mortgage adviser may also have the additional equity release qualification, most commonly refereed to as a Certificate in Equity Release.

This qualification allows anyone holding a CeMAP qualification the ability to also offer equity release products. Equity release is tightly regulated and there are special considerations when giving equity release advice that go above and beyond standard mortgage advice.

If you’re looking for an equity release product you MUST ensure your adviser has the Certificate in Equity Release from either the London Institute of Banking & Finance or CII.

At Boon Brokers, we’re fully qualified and regulated to advise on equity release. As a fee-free, whole-of-market broker, our dedicated advisers can provide you with knowledge of the mortgage market, helping you evaluate whether equity release is the right option for your needs.

How Are Mortgage Advisers Regulated?

Financial and mortgage advice in the UK is regulated by the Financial Conduct Authority (FCA).

To provide advice or arrange a regulated product, an adviser must be registered with the FCA in one of two ways.

Direct Authorisation

Most individual financial advisers are not directly authorised by the FCA. This is because of the high costs involved, as the FCA charges a levy.

In most cases direct authorisation is held by firms or financial adviser groups. In rare cases you may find that your financial adviser is directly authorised by the FCA, and this is normally because they want to operate individually of other financial bodies or firms.

Direct authorisation allows financial advisers and mortgage advisers to access the whole market of products that they’re qualified to advise about and arrange.

You can check online if your adviser is directly authorised by searching for their name or company name on the FCA register.

Approved Agents

An approved agent will be an individual (or in rare cases a company) that has FCA authorisation under someone else’s direct authorisation.

This is a common practice across the insurance and mortgage industry. Typically, a mortgage network will hold the direct authorisation with the FCA, and an individual will apply to the mortgage network to become an approved agent.

In return the agent must adhere to the mortgage network’s guidelines and compliance checks. Mortgage networks normally place limitations on a mortgage adviser if they don’t have a whole-of-market panel of lenders (more on this further down).

When an adviser provides advice on a financial product, they must tell you how they’re authorised (whether directly or not), and they must tell you what restrictions they have. This could include their list of lenders to their whole-of-market status.

Commercial Products and Regulation

It is important to note at this juncture that in commercial circumstances, such as business mortgages or commercial insurance policies, your adviser might mention that the product is unregulated.

This is because the FCA is a body concerned with protecting non-commercial consumers. The nature of most commercial products is that they have structures that differ significantly from traditional consumer financial products.

A good example to put this into perspective is bridging loans. A bridging loan can be regulated if it is secured against property that the borrower (or immediate family) is using or intends to use in the future.

If a bridging loan doesn’t meet this criteria, then it will be an unregulated product.

The adviser doesn’t need to make you aware if a product is unregulated, but they MUST make you aware if you’re receiving advice on a regulated product.

If you’re seeking financial advice about a commercial product and you’re unsure whether or not, you have regulatory protections you should ask your adviser who will be able to explain this in more detail.

Whole of Market Vs Limited Panel Services

The last area to be aware of when approaching an adviser for a mortgage is whether they’re a whole-of-market adviser or if they only have access to a limited panel (select panel).

Whole of Market Advisers

The term whole-of-market means that the mortgage adviser will have access to a range of lenders across the UK mortgage market.

With that being said, the term ‘whole-of-market’ is a bit of a misnomer, as a whole-of-market adviser won’t necessarily be able to access every single lender in the UK market – just a much wider section of the mortgage market. For example, a whole of market broker might have a select panel of lenders for each mortgage product type.

This can be confusing if you’re looking for truly unbiased advice and want to know you’re being offered a broad enough range of options. A good idea is to ask your adviser how many lenders they have on their panel to gauge how much access they actually have across the market. For example, a truly whole of market broker with full coverage of the market would have access to over 90 lenders in the U.K.

Limited Panel Advisers

Limited panel or select panel advisers only have access to a narrow range of lenders. This means they can’t always recommend the full spectrum of mortgage options available in the UK. For instance, if none of their lenders offer bridging finance, they won’t be able to arrange it for you.

Typically, these advisers are part of mortgage networks with pre-agreed deals from specific lenders. In some cases, they may even be tied to just one or two providers.

A common example is a bank’s in-branch mortgage financial advisor. While they hold a CeMAP qualification (or CII equivalent), they are restricted to offering products from their own bank—limiting your mortgage choices.

Benefits of Using a Mortgage Adviser over a Financial Adviser

There are 3 main advantages of using a mortgage adviser over a financial adviser to arrange your mortgage.

1) Cost

Importantly: A lot of financial advisers will charge upfront for a consultation, with some financial advisers in the UK charging hefty upfront fees.

It’s crucial to ask about your adviser’s total costs upfront, as an initial consultation with a financial adviser can sometimes result in a significant fee.

Some mortgage brokers also charge for their advice, but generally, fees are higher for financial advisers than for mortgage brokers.

Here at Boon Brokers, we offers all advice for FREE with no obligation to arrange a mortgage product through us. We believe our clients should be able to receive the advice they need without paying potentially costly advice fees. We can also arrange your mortgage for you, free of charge.

2) Lender Panels

The majority of financial advisers in the UK are ‘one-man bands‘ and as a result, they tend to either subscribe to mortgage networks or only complete business with select lenders.

Using a trusted whole-of-market mortgage broker – like Boon Brokers – can give you a wider range of lenders and products to choose from.

Boon Brokers is a truly whole-of-market mortgage broker with access to over 90 lenders in the U.K.

3) Expertise

It is fair to say that a financial adviser will not be dealing with mortgages on a daily basis, especially when you consider the large range of other products they provide advice on.

Mortgages are not always easy products to arrange and there can be many complications that an inexperienced financial adviser might encounter, compared to a mortgage adviser who deals with mortgage applications day in day out.

Boon Brokers specialises in mortgage products, and we arrange mortgages for our clients on a daily basis.

Can A Financial Adviser Arrange My Mortgage?

Many financial advisers hold the DipFA qualification, enabling them to offer investment and pension advice. However, not all financial advisers with DipFA have the CeMAP or CII equivalent qualification required to provide mortgage advice.

Before proceeding, always check if your adviser is fully qualified and authorised to recommend mortgage options.

Even if they are authorised, it is still recommended that you ask the following questions and compare their service against the services of a mortgage adviser:

While some financial advisers are qualified to advise on mortgages, they could lack the same market access or day-to-day experience as a mortgage specialist. At Boon Brokers, our qualified and regulated mortgage advisers provide you with fee-free advice that’s tailored to your needs. With access to the whole-of-market, we help our clients secure the most suitable mortgages for them – with no hidden fees.

It is worth remembering that having a qualification to arrange a mortgage is very different than having experience in dealing with all the intricacies of arranging and advising about mortgages.

What Are the Benefits of Using a Financial Adviser When Buying a Home?

Like a good mortgage adviser, a financial adviser can give you advice about your income and expenditure as well as how to save and document your deposit.

Financial advisers will also have an added advantage in this respect as they can give investment advice that could make achieving your desired deposit amount easier.

Crucially – a mortgage adviser CAN’T give investment advice unless they hold the DipFA qualification.

That said, if you’re looking for expert help securing the best mortgage deal with the lowest possible rates, then Boon Brokers is the answer. Our dedicated experts will help guide you every step of the way with fee-free, whole-of-market advice that is tailored to your needs.

Contact Boon Brokers today to talk to your dedicated adviser and begin your mortgage journey with confidence.