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Equity release
19
Ignore the
ignorance
There is still widespread ignorance regarding home
reversion plans. Alison Beeston, compliance &
communications manager at Bridgewater Equity
Release, explains
ridgewater is constantly just from the advisers who attended but For those who think I may be going over the
B
involved in making worryingly a minority of provider top, then consider the similar context that
presentations and working with representatives also seem to lack this rounded existed then.
advisers regarding home knowledge.
reversion plans (HRPs), the Assumptions
potential market for them and Knowledge Advisers had an over-riding confidence in
where they might be suitable for certain It is important that all providers are honest, certain assumptions for the future and an
customers. This is clearly even more objective and knowledgeable about the possible unwillingness to consider the alternatives at the
important in the wake of the recent Which? advantages and disadvantages of all equity time, notably the capital and repayment
report that, following a range of mystery release products for the sake of the industry as mortgage, because it didn’t have the potential
shops, revealed a tendency for some advisers a whole. It is vital that advisers are given to deliver big lump sums back to the customer
to ignore HRPs or simply dismiss them out objective information and guidance to ensure at the end of the term. Basically, the capital and
of hand when it came to any discussion of they have sufficient knowledge and repayment mortgage was considered too safe
equity release with their clients. understanding to set out all the options to the an option and while the customer would
Needless to say, as the UK’s leading HRP client and advise professionally. The sheer certainly have known where they stood with it,
provider, the Which? report was rather number of providers of lifetime mortgages the endowment alternative offered a potential
worrying news and therefore we have stepped outweighs those representatives of HRPs so for greater reward. However, greater rewards
up our commitment to educate advisers about they have an even greater responsibility to be come with a far greater risk. In this particular
the plans themselves and their usage. Having balanced and objective in their opinions. case the risk was that the endowment would
conducted a number of these recent We acknowledge that HRPs are never going not perform as expected at the same time that
presentations I can see that this commitment is to take a huge share of the overall equity release house values came back – unimaginable for
one that will need to be fulfilled over a market, however they do have an important many advisers at the time.
considerable length of time. There is still place and if they continue to be overlooked
widespread ignorance about HRPs and when then I fear we could be heading for another Comparison
they may/should be considered. This was not scandal like the mis-selling of endowments. The comparison with lifetime mortgages and
www.mortgageintroducer.com November 2009 Mortgage Introducer
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