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Equity release news
19
Equity Release
Jon King,
managing
alliance to launch
director at
Hodge Lifetime,
The Independent Equity Release impartial advice. This advice is There are plenty of advisers who
looks at how
Adviser Alliance (IERAA) is to best sought from advisers who are have passed the relevant
equity release
be launched, which aims to totally independent of the lenders, qualification to be able to advise
promote the use of highly qual- who have significant experience on on Equity Release, but many of
has changed
ified and experienced advisers the subject and adhere to the them choose not to. This Alliance
within the specialist area of equity highest standards. aims to bring together those over the years
release, including Lifetime The Alliance has been set up to advisers who can demonstrate they
Mortgages and Home Reversion provide a body of advisers that all are able to provide equity release
Having been involved in equity
Schemes. have the same aims and ideals – to advice at the highest level. It will
release for almost 20 years, I’m
This is an area of advice that has provide the level of quality and create an online directory listing so
frequently asked how the
significant impact on potential service that the subject demands that members of the public,
industry has changed over this
clients and their families, with and to ensure that, when in doubt, consumer and charity groups, as
emotions playing a significant part both clients and their other well as legal professionals are able
time.
in the decisions being made, professional advisers know where to choose an experienced adviser
I’m always particularly
therefore it is essential that to turn to for the highest standards in their area. This will also enable
happy to talk about the
applicants and those considering of advice. All IERAA advisers will other advisers, who would rather
improving standards, plan
using equity release do so from a work to an agreed code of conduct not provide advice in this area, to
guarantees and range of
position of real knowledge and and offer a common charging source and recommend a suitable products available.
with the benefit of excellent, structure to ensure reasonable fees. local adviser.
But perhaps the most
satisfying aspect has been the
Fresh thinking needed for
number of intermediaries who
are now actively involved in the
business. All those years ago
retirement market
there really were only a handful
of companies who would claim
A landmark study of Financial circle6
to advise in this area. A recent
Regulation should be amended
survey conducted by Hodge
Planning through Retirement circle6
The recommendations were:
Regulation and legislation to allow greater consumer access Lifetime showed that 765
outlines changes required by should be based on how
Government, retirement product consumers behave rather than circle6
to advice on equity release
intermediaries were advising or
The level of capital disregarded
able to conduct business in this
providers and independent how perfectly rational for retirement means-tested
area. A tremendous step
financial advisers to ensure people
circle6
consumers would behave benefits should be reviewed
forward and one that I am
in the UK maximise their income There should be a review of on a regular basis to ensure the
and wealth in retirement. financial capability programmes rules do not penalise equity
convinced will continue.
The study from the Association to ensure they are improving
Week after week the press
of Independent Financial Advisers financial education levels as circle6
release
The Government should
talk of reducing pension
(AIFA) and Prudential UK was
overseen by an editorial board that circle6
cost-effectively as possible establish an independent
benefits, with recent coverage
Independent financial advice in review of the rules requiring
concentrating on the demise of
included Rt. Hon John Gummer the workplace should be better pension income to be secured the private sector final salary
MP, Independent Chairman of promoted and funded by the by age 75 to ensure they
schemes. The ‘baby boomer’
AIFA and Lord Lipsey, ex-
Chairman of the Financial Services circle6
Government and employers appropriately balance the needs
generation are happy to talk
Clear guidance and training is of retirees with the interests of
about their house in terms of
Consumer Panel. needed for those who provide
its monetary value, as well as a
In the face of increasing
longevity and the scaling back of circle6
decumulation advice circle6
taxpayers
A critical success measures for
There is a need to continue to the RDR should be that it
home. This is borne out of the
defined benefit pension schemes develop and improve products, increases the availability of
generation who embraced buy-
the report calls for an independent which have a broad band of advice and guidance and raises
to-let and spent endless hours
review of the decumulation suitability that can be the level of engagement with
speculating on house prices -
market, where people use their
accumulated assets to finance their circle6
understood by the consumer
the next step will be to actually
Product providers should adopt circle6
consumers
We recommend the Government involve that value in pension
retirement. It also recommends a consistent approach to product commissions an independent
planning.
that Government and regulators features, product suitability, review aiming to deliver
Therein lies the next chapter
must share a common approach product comparisons, and risk institutional arrangements that
in the unfolding story of equity
and objectives and recognise the and rewards. An industry ensure a joined-up regulatory
release.
importance of the market in its standard glossary of terms and public policy approach to
own right. should be agreed decumulation
www.mortgageintroducer.com July/August 2009 Mortgage Introducer
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