The first time Andrea Rozario came to Mortgage Solutions’ attention was after a mortgage event in 2004. An equity release adviser called to say he had met the most terrific broker who specialised in equity release and suggested all trade journalists should meet her, as she would go far in the industry.
Three years later, and Rozario has become the director general of Safe Home Income Plans (SHIP). The industry body announced in the summer it wanted to appoint a director general to focus on developing strategy for SHIP and communications activity to various people involved in the sector, including IFAs, product providers, consumers, the media and regulators. The appointment is the first permanent one for the body and Rozario will have a London location from which to operate. Meeting Rozario in her second week on the job, the pressure is already starting to build.
Rozario started as a mortgage manager at an estate agent in Scarborough. Following a degree in business and management, she went into the mobile phone industry as an operations manager for a distribution company. When the market reached saturation point, some companies went under, including the one Rozario worked for, so she set up her own mobile phone recycling company.
“I then ended up back in financial services on a self-employed basis, dealing with mortgages and general insurance,” she says. “But the reasons I got out of the industry in the first place were still there when I got back into it. It was not what motivated me. As I got back into the industry, I started noticing more and more about equity release and thought it was really interesting.” Her firm, Rozario Harris, started to grow. It came to the point this year when she had to make the decision as to whether she should grow the business and employ other brokers or to change direction and become the director general of SHIP.
Going from one side to the other – from a broker to a representative of product providers – is obviously going to be a challenge. However, Rozario had experience of evolution before her move to becoming something of a spokeswoman for the industry. She says: “I had always had a good relationship with providers within the equity release industry. It is almost like a family. I could understand some of the issues they were facing. I had fallen into this role of being a spokesperson for equity release, but that is probably because I felt so passionate about it. A lot of what I had read about equity release, I thought, was not doing the industry justice and it frustrated me. And I felt we needed a right to reply.”
The most obvious bugbear for Rozario is the “inaccurate representation and outdated views that go on in the media, which solicitors also have and even some advisers have”. Rozario says she will be striving to increase people’s awareness of the products available. “I do not think people are aware of how good the products are today and how much innovation there is. There are safety measures in place and people consider it to be a complicated market. The concept is really quite straightforward, but there are all sorts of solutions to meet various needs. That is what gets overlooked and it gets pigeonholed as something people still need to be wary of.”
However, she has identified that attitudes are changing, particularly among the baby boomer generation. She says, “My experience as an adviser is that this generation tends to take things with a pinch of salt and will not take things like press reports at face value. I think they will drive opinions of consumer bodies because ultimately they are the consumer. What we need to do to break down barriers is education and help people have the ability to make an informed decision. I am in the process at the moment of putting together strategies of how we are going to move forward. We have to get a clear message across to all of those people who have a vested interest so they can understand how much the equity release industry has changed over the last decade.”
Consumer curiosity
Rozario has already seen genuine curiosity growing organically among consumers. For instance, a recent visit to the Citizens Advice Bureau revealed equity release to be the most common of all enquiries. She adds: “It is a case of building confidence, so people do not think it is such a radical step to take equity release. It is more of a natural option which they can weigh in line with other options.” But what about the intermediaries themselves – surely the market cannot grow without them? Rozario says there is a natural concern among advisers due to the legacy of equity release and the fact the FSA made it clear the sector was under the spotlight. She sees an opportunity for advisers who genuinely embody treating customers fairly to take a holistic approach to retirement options. This goes for networks too, although many still have a ban, or at least a very wary approach, towards equity release.
The new director general role is a massive coup for SHIP but for some, it is difficult to see what contributions it can possibly have in a regulated environment. “What we are going to do now is to build a strong communication strategy to help enable people to have access to accurate information and that is through Government, to the general public, to consumer bodies and to the media. Everything is going to be looked at from the website through to literature and how we will deal with key audiences. My job is to drive that forward.”
Although the FSA has appeared to be scathing in its criticism of equity release, Rozario feels things are getting better. There have been cries from advisers for the regulator to point out the progress the industry has made. But Rozario believes this is her role. She says: “It is all a case of putting things into context. At the end of the day, the FSA is there as a regulator. It is SHIP’s role to promote the industry.”
She adds, “If you put us next to other sectors of the industry, we have mandatory qualifications, a code of conduct for SHIP members, safeguards in place, four key principles including the requirement for independent legal advice for clients, the no negative equity guarantee and security of tenure. I cannot think of anything else that has as many safeguards in place but is so misunderstood.”
Coventry Building Society certainly has a grasp of the equity release industry, joining SHIP next year as it launches into the sector. Rozario is obviously chuffed the society – arguably a high street name – is going to become a member, particularly after the Portman Building Society pulled out of equity release following its merger with Nationwide. Rozario is obviously perturbed at Portman’s move. She says: “I was more disappointed with the comments. I felt it was short-sighted. I also think there were other reasons for it pulling out of the market, but it was before my time as director general anyway. I was more disappointed with the way it went about pulling out, rather than the actual leaving.”
Rozario is obviously referring to Matthew Wyles, executive director of Nationwide, who had likened its exposure to equity release as “flogging a dead horse”. Words hardly helpful for any organisation trying to improve its profile amongst the British public. Rozario admits there are further prospective members of SHIP speaking to her, including advisers and lenders. She would not reveal who, or how many are looking to enter the sector, but she appears to be confident the ranks of SHIP will be strengthened.
Interests and reputation
What of internal struggles within SHIP? One lender had complained to Mortgage Solutions that the lobbying process is unfair, with those wanting to enter into the market struggling with the onus to present their propositions to potential competitors in order to gain SHIP membership. Rozario, as expected, has a measured response to this issue. She says: “What we have to bear in mind is the whole reason for SHIP’s existence and the reputation it has is because it has guarded it so fiercely. To ensure that continues, we have to ensure safe products enter the market. If they are coming under SHIP’s banner, they have to abide by the rules and they have to ensure the level of safety remains high.”
However, she concedes: “I think as time goes on, it will be important to look at the rules and to see how they may well be improved upon, to enable people to feel they can satisfy the criteria to enter the market without the feeling they have to run the gauntlet, so to speak.”
Rozario is having a tough time batting away questions as to how exactly she plans to implement the changes she proposes, but there are some issues she is determined to tackle sooner rather than later. The role of solicitors is certainly on her agenda. She relates one piece of research conducted by a SHIP member who found the least satisfying experience for the majority of clients was dealing with solicitors. Rozario is concerned there are still too many solicitors who have a negative image of the industry.
She says: “There are still solicitors who do not deal with equity release on a regular basis – that dabble, if you like. They have an outdated view of how equity release works and are not necessarily aware of the safeguards that are in place.” She will not go as far as saying there should be a recommended list of equity release solicitors available from SHIP, but she applauds the work of individuals such as Tish Hanifan, barrister and director for education and training at IFA Care.
Another topic Rozario is keen to address is sale and leaseback, which has received much press attention of late. Equity release, courtesy of certain investigative television and radio programmes, has been dragged into the debate. Rozario says: “I think it is important to be able to distinguish and be clear about the huge differences between regulated equity release and sale and leaseback. Whether there is a place for regulated sale and leaseback is up for debate. At the end of the day, members of SHIP must abide by a code of conduct. None of that is in place – that I have seen – through the unregulated market of sale and leaseback.” Rozario has pledged her support towards a working party, set up by Mortgage Solutions, to discuss the options for sale and leaseback and possible regulation (26/11/07, p1).
With such a strong campaigning spirit, perhaps we will see Rozario rise up the ranks of financial services, and she may end up at the Association of IFAs, the Council of Mortgage Lenders or even the FSA. Of course, this in an unfair question to ask her, having only just started in the SHIP role. She says: “All I can see myself in is equity release. What will happen in the future, nobody knows. My interest is in equity release, and I strongly believe that we are in the midst of a demographic revolution. There will be an impact because of the baby boomers. The fact we are living longer, healthier lives, with vastly changing attitudes, is going to affect society as a whole.”
With such dedication to a small section of the overall financial services market, it may only be some time before the equity release sector achieves the size, scale and respect she believes it deserves. n
