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Equity release
25
Get your
house in order
Alison Beeston, compliance & communications
manager at Bridgewater Equity Release, looks at the
recent initiatives in equity release and why the
Which? Report is to be congratulated
n a notoriously ‘slow’ couple of However, the main focus of this particular circle6 A small number of advisers actually refused
I
months for news, equity release and its article is the more publicity fuelled Which? to give any written information to the client
associated advice arena has had its fair report on the findings of its equity release until the client could confirm that they had
share of publicity both in the trade mystery shopping expose – for want of a better checked out the potential grants on offer.
and national circles over the past few word. The headline of which – pardon the pun
weeks. There have been a number of - was pretty damning “Two thirds of equity circle6
This is encouraging.
There were large variances on fees charged,
papers released lately which have worked to release advisers fail Which? test”. ranging from a few hundred pounds to
highlight the equity release sector in both a
positive and negative light. Mystery shop circle6
several thousand
Major gaps were identified in many of the
The Association of Independent Financial Which? conducted its mystery shop using advice processes including very basic aspects
Advisers (AIFA) recently launched a substantial ordinary consumers as field workers armed such as producing and explaining an initial
piece of work entitled – “Financial Planning with two straightforward client scenarios which
through Retirement” – which recognises the were tested on 40 advisers. The field workers circle6
disclosure document (IDD)
Virtually all the advice processes
special nature of the advice pertaining to were instructed to go to the point of followed consisted of just one stage i.e.
retirement and calls for a range of initiatives, recommendation, all by formally booked the adviser conducted their factfind and
not least a glossary of plain English terms appointments. The mystery shopping exercise made a product recommendation in one
alongside a programme of financial education targeted a mixture of specialist equity release
and a “joined up regulatory and public policy advisers and independent financial advis circle6
interview
Most advisers did not explain all the generic
approach to decumulation”. ers (IFAs). Overall, five out of 12 equity options available to the client ie lifetime
Safe Home Income Plans' Facing The Future release specialists passed the Which? test, mortgages and home reversion plans
discussion paper has also just been published compared with eight of the 28 IFAs. (HRPs). A shocking number of advisers told
which is aimed at sparking debate on how the
equity release market should adapt for the circle6
The main findings of the exercise were:- clients that HRPs were no good for them
A difficulty in finding the non specialist even before they had conducted a full
future. The paper – quite rightly - exposes
funding as one of the biggest concerns for circle6
advisers who offered equity release advice factfind.
No clear differences between the specialist The final point is particularly damning in
providers whose margins are being squeezed by
having to bear additional costs including the no circle6
equity release advisers and the other IFAs highlighting the ignorance surrounding home
Most of the advisers met their clients face- reversion plans. Further education is clearly
negative equity guarantee. to-face needed for some.
www.mortgageintroducer.com October 2009 Mortgage Introducer
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