Despite the inarguable evolution the sector has undergone to widen its appeal, there is never time to stand still and admire the view. As the market has grown, the Council has grown with it and adopted a proactive approach to encourage and embed good practice, rather than merely reacting to unfolding events.
While the sector continues to solidify its standing as a modern, flexible later life product for an increasing cohort of older homeowners, independent research from Mintel’s recent report Equity Release Schemes identified “strong consumer protection” as the most important feature for people who would consider accessing equity from their property.
This serves as an important reminder that, as the market innovates, we mustn’t lose sight of where we have come from.
Need for regular revision
We are fully cognisant of the need for trust and protection and nowhere is this more clearly evidenced than by the continual updating of our standards, rules and guidance. The tenth iteration takes effect later this month, following a two-year process of development and consultation with members, industry, regulators and consumer groups.
To this end, the standards are the antithesis of a box-ticking exercise, but rather a fluid set of recommendations that recognise there is no one-size-fits-all product or process and, as a result, the safeguards allow different approaches to reach good outcomes.
Central to this latest milestone is the fifth product standard which enshrines that all new customers taking out lifetime mortgages will be guaranteed the right to make penalty free partial loan repayments to reduce the cost of later life borrowing, subject to lender criteria.
The update reflects ongoing product innovation and the flexibility later life customers increasingly demand to manage their wealth.
The update also includes extra guidance for advisers in a range of scenarios, such as encouraging drawdown customers to regularly review the suitability of their plans. Evidencing conversations around interest or capital repayment product options, which can mitigate the cost of roll-up interest and are especially important for younger customers, also plays a prominent role.
Looking ahead
As we reflect on 30 years of setting standards, the Council is uniquely positioned to draw on expertise from across the customer journey to protect consumer interests and minimise unintended consequences. We have multiple new initiatives planned for 2022 to drive the development of market practice in response to growing demand and increasing membership from a diverse range of firms.
We have been especially encouraged by widespread member appetite to support working groups looking specifically at post-completion consumer communications and the presentation of fees and charges to customers, to ensure both areas are working effectively.
We are looking to establish a Tech Forum to advise the Council on emerging opportunities and challenges regarding the use of technology to improve the customer experience. Both these initiatives are further evidence of our desire to push things forward and never sit still.
On the technical front, the Council will also be introducing a legal competency framework, expanding our series of policy webinars and launching a new legal certificate this year.
Our ever-evolving standards have become a reliable benchmark of trust for consumers by demonstrating members’ commitment to going above and beyond the minimum standards, rather than simply going through the motions.
With an ageing population and an increasingly dynamic later life market, the evolution of modern equity release leaves no scope for anyone to rest on their laurels any time soon.
