According to a Which? undercover investigation, two thirds of financial advisers failed to pass all the benchmarks for giving good advice on equity release.
When Which? researchers conducted an undercover visit to 40 advisers, they found that only one third met their benchmarks for good advice.
Equity release advisers must conduct a ‘fact-find’ before giving their recommendation. In the Which? study, some 23 failed to do this to the expected standard, and seven didn't even enquire about the ‘homeowner’s’ income.
Geoff Charles, Managing Director of Bower Retirement Services, an FSA regulated independent financial advice company offering specialist advice on equity release throughout the south of England, says: “When considering equity release it is vital to receive independent financial advice from a Financial Services Authority (FSA) regulated equity release adviser who will thoroughly investigate your situation and provide you with a comprehensive financial planning report on any recommendation, including alternatives to equity release. The adviser should also only recommend Safe Home Income Plans (SHIP) endorsed equity release plans.”
The full scope of alternatives must be communicated as must be the disadvantages of taking on an equity release plan says the Which? report.
Worryingly, during the Which? study, some advisers failed to mention some of the important factors such as how quickly the debt would grow or the effects of compound interest. Another thing that stood out was that some advisers were a bit ‘cloak and dagger’ concerning their fees: instead of disclosing them at the start, 13 advisers waited until later on and 5 failed to mention them at all.
Geoff Charles says, “I am completely upfront with everything when communicating with customers. I believe in ‘get the difficult things out of the way now and make it easier in the future’. Informing customers now of the disadvantages is a natural part of my service, as is fully explaining my fees.”
Bower Retirement Services is committed to providing an exceptionally in-depth equity release advisory service which involves fully assessing specific financial needs and circumstances in great detail. A substantial means-tested benefits entitlement report together with a detailed and fully tailored Financial Planning and Recommendation Report is produced and fully explained to customers before they make any decision on equity release. Lifelong support is also offered to all customers of Bower Retirement Services.
