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Equity release
and following last year’s publication of a rather
scathing Which? report into the quality of equity
release advice, it is more important than ever
that advisers are fully clued up about the service
and products they offer.
One of the Which? report’s lowlights was the
conclusion that advisers are still way too
dismissive of home reversion plans as a potential
product solution. As a provider of such products
this is dismaying and Bridgewater in particular is
working hard to educate and inform advisers
about the ‘real’ home reversion market; we are
trying to dispel the firmly-held and quite
frankly wrong opinion of it, held by a
number of advisers. These old, bygone
views are unfortunately still in existence.
For example, many advisers simply dismiss
reversions if the client wants to release less than
100% of their home’s value when it is quite
possible for clients to release a percentage of the
value and come back for more at a later date.
Responsibility
Everyone working in the sector has an
ongoing duty and responsibility to ensure
that the advice provided is of the highest
quality. Transparency and inclusivity is
vital in terms of spelling out exactly what
choices the consumer has and is signing
up for and ensuring they are
comfortable with their actions, and
that their family (where
requested) is also kept fully in
the loop throughout the whole
process. It seems apparent from
the Which? report that too many
advisers are papering over the cracks in their
own knowledge and putting their clients at risk
because of this. The potential damage to the
industry’s reputation as a result of a mis-selling
scandal is huge. Advisers need to ensure that
their own knowledge or preconceptions are Many expect a change of Government in the
not obstacles to good advice. And don’t forget Spring so where will this leave the equity release
that in this case there is no financial cost to the release advisers; if this isn’t possible then at the sector? And there lies the rub in terms of how
adviser of providing appropriate advice as both very least we should try to form is an umbrella we should look ahead to the rest of 2010. SHIP
product groups can provide similar income group to co-ordinate action amongst the various are working hard seeking to show the benefits of
levels. bodies. our products to our political masters in order to
While some advisers may have fought against highlight how equity release could be one of the
the findings of the Which? report there does Lack of clarity answers to the pension and retirement problems
seem to have been an acceptance by those within For too long the equity release sector suffered which continue to grow. The problem being of
the profession that some sort of united stance from a lack of clarity and this often confused the course that we are in a state of political flux and
must be presented to increase standards and very people we were supposed to be helping. have been for a while.
promote the sector. A number of advisory bodies Regulation did bring with it some much-needed Political change and tightening government
and societies were therefore launched through structure and stability and it will have the same finances – which will come with a new or old
the year including SERA and IERAA which have effect on the Sale and Rent Back (SRB) market Government – leaves us all with plenty to think
joined other groups such as Specialist Advisers which is in the process of being taken under the about going forward. 2009 was certainly eventful
for Equity Release, SOLLA and AMI which runs auspices of the FSA. 2009 saw the interim and in all likelihood 2010 will be even more so.
its own equity release group. While any regulation of that market with full regulation to The adverse conditions the Government and
organisation which is established to raise come this year; there are still some significant consumers continue to face may well bring
standards is to be commended, it is a worry that issues to be ironed out, not least the fact that opportunities for the equity release industry; we
by having so many we dilute or confuse the there is still no security of tenure for SRB are not travelling along a smooth road but there
message. For 2010 I would certainly like to see customers despite this being highlighted as one are still real benefits and opportunities in making
some continuity between the groups with the of the major problems with the product. the journey. I hope you and yours will have the
ideal being one group representing all equity However, we are at least on the right road. chance to enjoy them over the next 12 months.
February 2010 Mortgage Introducer www.mortgageintroducer.com
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