The firm also admitted concern that non-specialist advisers are moving too quickly to accept a client’s initial product preference instead of gathering the relevant information to make their recommendation. It warned some advisers are telling clients what they want to hear rather than what they need to and that this could leave the client with an unsuitable product, particularly in the current climate.

Peter Welch, head of sales and distribution at Bridgewater Equity Release, said that with the FSA having issued warnings recently on equity release advice, firms need to look at their advice processes and how they handle their clients. He continued: “Customers are much more likely to respect an adviser’s bold recommendation when it is clearly the one best suited to managing their risks and giving the highest probability of meeting their needs and aspirations, even if it may not be the advice the customer ’emotionally’ wants to hear.

“A key focus for Bridgewater throughout 2009 will be providing further education and information to those advisers who may be looking to enter the equity release sector for the first time or are intent on shoring up their firm’s practices in this area. It is clear that those firms who do not take their responsibilities seriously will be doing their clients a major disservice and are therefore likely to find themselves firmly in the regulatory spotlight.”