equity release
Quality control
The quality of equity release advice is under the spotlight yet again
as calls for increased competency continue
by
needs and circumstances. This was a from the provider to allow them to
Alison Beeston,
real problem highlighted by last yearnulls release further funds. null a result, we
compliance nullichnullreport which suggested that have seen some customers in this
manager, a signinullant number of equity release position turning to a home reversion as
nullidgewater
advisers were far too quick to dismiss a potential means of securing the funds
Equity
reversion plans. nulldeed, there was even they need.
Release
talk of product bias with a number of
This is certainly an interesting time for advisers being unwilling and unable to Mis-selling
the whole of the equity release market countenance the recommendation of a nulll of this of course continues to put the
with much speculation about its current reversion, even before it was possible to spotlight nullmly on advisers who have
state and where it may evolve in the decide the most appropriate product for recommended lifetime mortgages for
future. For example, you may have the nullystery shoppernull clients while not fully understanding
recently seen a debate around the This unwillingness to consider the clientnulls own needs but also, in all
provision of equity release advice via reversions, or product bias, is clearly likelihood, not understanding home
the telephone with the recently formed inappropriate for professional advisers reversion products and what they can
adviser group, The Society of Equity and could land some in hot water if we provide. nulldo not wish to be the voice of
Release nullvisers, suggesting that are to believe some of the anecdotal doom and gloom however it is entirely
telephonenullased advice should be evidence now emerging from the possible that we could have accusations
banned. equity release market. nulle have of misnullelling bandied around the
nullthough it has pulled back from this always questioned whether lifetime industry again because of advisers
initial call for a nulllanket bannullone must mortgage customers who wanted to adopting a nulllind spotnullwhen it comes
consider the issue of telephonenullased release further funds down the line to reversions. nulldo not apologise for
advice and its merits as something of a would be able to do so and it would repeating that all misnullelling scandals
red herring. The real issue is around the seem, unfortunately, that our warnings have been caused by advisers not fully
overall quality of advice equity release have become true. nulle are hearing of considering all the product options null
clients receive. nulld, quite frankly, as cases where the client has had a nasty think lownullost mortgage endowment
long as the nullm providing the advice shock as they have been unable to plans.
over the phone has all the appropriate release further cash from their lifetime The equity release adviser should
systems and controls, such as call mortgage as they expected. null house always be looking to establish what
recording and monitoring, then there prices have fallen, putting considerable the client wants at this very moment,
should be no difference between the pressure on nullTnull, and many providers alongside what they may wish to
advice given over the telephone or facenull have tightened their lending criteria achieve in the future in connullnction with
tonullace. because of credit crunch and liquidity their fundamental attitude to risk. There
issues, funding has contracted causing is, of course, always a nulle balance
Quality a subsequent squeenull on further and compromises in providing the best
null nullsay, of wider note and greater advances leaving existing borrowers in advice for clients nullthe opportunity to
concern is the quality of equity release the lurch. benenull from the potential gains of house
advice being provided, particularly null is entirely plausible that those price innulltion nullnullnullversus security.
the nullverecommendationnullof lifetime null customers who stressed they did wish nulld thatnulls without consideration of life
mortgage products. null a home to release funds in the future at the expectancy and plans for their estate,
reversion provider you might expect time of the initial advice, may now be etc. nullbut the advice must be based on
nullidgewater to say this but we have questioning the adviser and the advice the considerations of the client not our
always felt many advisers have been they received. They will probably own. This is why recommendations
too quick to move to recommending be wondering why they were ever of lifetime mortgages in many cases
lifetime mortgage products without truly recommended a lifetime mortgage in the may be so wrong. null particular, null
considering the full facts of a clientnulls nullst place if there was never a guarantee would suggest that the attitude to risk
26 mortgage introducer march 2010
MI p26-27_0310.indd 2 23/02/2010 11:02
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