I very much hope you are well and safe.
Since our last newsletter we have worked through unprecedented times as our country continues to deal with the impact of coronavirus. It has been a challenging time for all sectors and this includes Equity Release with Key’s market monitor demonstrating a 27% decline in customers in Q2. This data will be fed into the Council’s market wide figures which we expect to issue at the end of the month.
The FCA also published a review into the sale and advice of equity release. Although the FCA found equity release is ‘working well for many customers’ it found advisers must do more to ensure they are giving appropriate equity release advice. (please read Evershed Sutherland’s digest below). The Council takes the FCA’s findings extremely seriously and are disappointed that some advisers have fallen short of the highest possible standards. To provide context, it is also important to note that equity release makes up fewer than 2% of complaints about home finance products and of 38 complaints made to the Financial Ombudsman Service in the last year, only two were upheld.
Since, our Standards Board has updated our adviser checklist (please do read a week in the life of Graham Evans, Head of Compliance at the Equity Release Supermarket who played a significant role in the evolution of this important adviser support) which captures the most important points in FCA regulation and Council standards. This is a valuable and timely initiative and was covered in a very well attended webinar. Our webinar programme, referred to in this newsletter, provides industry support and also contributions from key influencers such as Clive Betts MP, Labour Chair of the Communities, Housing and Local Government Select Committee.
The Council seeks to work closely in partnership with the FCA and today we welcome their clarification regarding face to face advice that “firms should exercise their own discretion in determining whether or not a face-to-face appointment is absolutely necessary”. As one adviser said “I am sure this will be a great relief to companies and advisers alike who can now make arrangements to see clients in their own homes should this prove to be absolutely necessary.” Members can view further information about the guidance here.
The Council is due to meet with the FCA in the coming weeks to discuss its review and discuss our many initiatives aimed as supporting good customer outcomes. Significant work has already taken place both within the Council and the wider sector and we remain confident in our rules and guidance.
The Council continues to work closely with Government, Parliament and also the Bank of England as we provide market analysis and up-to-date information on our sector.
Please do take time to read this newsletter, I particularly enjoyed our sponsored article (many thanks to Pure) which examines the equity release and RIOs and the potential to grow these important products. This newsletter also a wealth of industry news and excellent contributions on vulnerability from Jon Dunkley, improving our standards by Sara McLeish, CEO of Legal & General Financial Advice, helping older borrowers make mortgage decisions by Emma Graham from Hodge, Jakob Lemberger from Magnetic Money’s first experience of advising on equity release and also an extract from adviser Richard Latteman’s book ‘Bricks into bread – navigating through the equity release minefield’.
Finally, you can be assured of the continuing hard work from everyone at the Equity Release Council as we strive to support our growing body of members who provide excellent service for their clients and communities, in these challenging times.
Please stay safe!
Jim Boyd
CEO Equity Release Council
