The Council has undergone a governance restructure. Communications manager and newsletter editor, Chris Fay, reflects on the changes and hears from the new recruits.
Independence has been at the core of the Equity Release Council since it was launched. The standards it inherited from its predecessor, Safe Home Income Plans (SHIP), were undoubtedly robust, but applying them to the entire industry and not just providers presented a new challenge, giving rise to the Council’s standards board.
The standards board operates as a delegated independent authority, separate to the Council’s board of directors. It’s led by an independent chair and benefits from two further independent representatives, along with industry experts drawn from the membership.
Critics might argue that trade associations represent vested interests, not the public interest. However, given the hugely influential role of the standards board, no such criticism can be levelled at the Council. Its standards not only predate statutory regulation, they still go above and beyond it to this day.
Not content to rest on its laurels, the Council is blazing the independence trail once again. Following an external review, it will now be led by a board of three independent non-executive directors in a new structure that gives members more opportunities to have their voices heard.
Barry Meeks and Mike Hughes became independent non executive directors (iNEDs) for the Council in October and joined a transitional board of directors with three non-executive directors who were in post before the review but are set to step down in 2023. Chair David Burrowes occupies the third iNED post.
These iNEDs have financial services and equity release experience in abundance and the move represents best practice in governance for both the corporate and the non-profit sectors. However, you might argue it’s merely evolution for a trade body with a longstanding affinity with independence.
“Independence has served the Council’s members and their customers well,” said David, a criminal law solicitor and former MP of 12 years, who has been chair of the Council since 2017.
“We set voluntary standards for our members which means we attract people who want to do more for their customers in the first place.
“But having independent people sitting at the heart of the organisation and now having wholly independent leadership, allows us to develop that ethos further, as we look to develop the market.”
“Being independent means we can take a much more customer-centric view,” said Barry, who has 30 years of financial services experience at board level and has spent the last decade as a regulator-approved iNED.
“As independent directors we can play our part in making the Council more robust and more relevant. While also keeping the end customer very much at the forefront of discussions, so customer-centric activity continues to be written into the values of the Council. Good governance is about taking what is going to be commercially sustainable and balancing it with what is going to deliver good customer outcomes.”
Mike Hughes has been in and around the equity release sector since 1991 when the Council’s predecessor, SHIP, was launched. He developed a market-leading equity release product in 2001 and has been a NED in the financial services sector since 2012.
“One of the reasons I joined is because this organisation already has a fantastic reputation in the sector,” he said.
“When you look at the trajectory the regulator is on, you can draw some parallels with the trajectory of the Council.
“The Consumer Duty is about bringing different parts of the sector together to focus on consumer outcomes and look at the customer journey, from start to finish. The Council is already good at that.
“iNEDs can absolutely bring something new to the table but it’s important to recognise what has been achieved over the last 30 years by the Council and its members, which gives us such strong foundations to build on.”
As part of the governance review, the Council has created seven member-led forums each focusing on a particular function or discipline of the sector. Representatives from each forum will also sit on a member panel that will engage directly with the board and executive, helping to address the challenges facing the sector and make the most of the opportunities.
“My view is that equity release is a product that everyone should be looking at as part of their later life financial planning, as a potential option,” said Mike. “At the moment that is simply not happening often enough and we need to up that game.
“Seven years ago we had pension freedoms, which gave people greater control and easier access to their pensions, but the wealth in properties is still considered separately, in the rare number of cases it is considered at all.”
Barry said he believes public understanding is one of the biggest challenges facing the industry.
He added: “I’ve had friends and family that have taken out equity release over the years, so I’ve experienced it through the consumers’ eyes and there is still a lot of misunderstanding. The question is how can we address these misapprehensions collectively as an industry?
“We are in an interesting position right now, we have the cost-of-living crisis and we have had real economic turbulence since the mini-budget, but that’s not unique to equity release, that’s everywhere. We still need to find a way of increasing the public’s understanding of this sector and what it can deliver for them.
“Equity release is a great product, but it’s not for everyone. It should not be the solution of first resort and it should not be the solution of last resort, but it needs to be somewhere in the mix.”
David said that the new governance structure, which formally recognises the member-forums and member-panel, means the Council is better equipped than ever before to represent its members.
“What we have is a new model for engaging with members,” he said. “One which has been designed to ensure the needs and wishes of all members are heard, understood and reflected in the board’s planning and decision making.
“The fact we’ve adopted this model as the Council marks the 30th anniversary of its standards was just by chance, but it certainly puts us in a strong position for the next 30 years.”
- Members will recall that the standards board was the subject of a recent consultation the results of which will be shared in time
