I would suggest there is something of a misconception about the equity release and later life advice market when it comes to complaints. A belief perhaps that the sector is inundated with them, when this couldn’t be further from the truth.
The Equity Release Council (ERC) looks into every complaint put to the FOS with an equity release element and it tells me that last year there were 271 complaints which mentioned equity release. Around 77 of them were actually about equity release, and only eight of them were upheld.
Of course, these complaints were not necessarily about the advice provided, but you don’t need to know that to see this is a very low level and the vast majority were not deemed to be complaints requiring redress.
However, even the threat of a complaint is not a pleasant experience and it’s perhaps no wonder that advisers will want to do all they can to ensure they don’t have to go through this. If it’s any help, FOS offers a hotline that advisers can contact to get advice on how to deal with complaints and which can act as a hand-holding opportunity, that might be particularly relevant if you’ve not received one before.
Making use of reinforcements
This low level of complaints is satisfying and, given the rigorous regulation we have to abide by and the high level of standards put in place by the ERC, for example, it is not surprising, but there are always elements to look out for which could result in that number rising.
One area of particular focus for everyone involved in this sector – and indeed, wider financial services – is that of client vulnerability, how we recognise this and having the systems and processes in place to deal with these cases in the right way.
Now, it’s a sweeping generalisation to suggest that just because the client is older in the equity release space that they are vulnerable in some way, but it’s also clear that the risk of vulnerability could well rise, the older the customer is. Equity release advisers with any experience will have quickly recognised the need to be vigilant in this area, and back in the day we would probably have said that teasing out this information was part of the ‘soft skill’ set required in this sector.
However, as you will know, vulnerability is taken far more seriously right across the board, but particularly in regulatory circles, and advisers need to be able to protect both themselves and their client.
That leaves advisers requiring the tools and services to be able not just to identify vulnerability and document this, but to be able to take that ‘diagnosis’ and to turn it into a means by which they can be safe and robust in terms of any advice and recommendation they provide to this client.
It is not necessarily an easy path to tread, which is why we have been working with vulnerability specialists, Comentis, to develop the technology required, to build this into the factfind, and to flag potential vulnerability, to provide recommendations about how to address this, and how to handle the client going forward. We’re also trying to ensure the delivery of this is not overly burdensome for the adviser, and that it simply sits neatly within the systems already being used.
It’s an obvious point to make but we have to get this right, because failure to do so will inevitably lead to potential consumer harm which in turn will lead to complaints.
Financial vulnerability, especially during a period like we are seeing now, is going to rise, so let’s make sure we are doing everything we can to firstly, identify it, and then help customers and ourselves to get the right outcomes for it.