Speaking on a debate panel following a presentation from David Burrowes, chairman of the Equity Release Council, Rob Sinclair, chief executive of the Association for Mortgage Intermediaries (AMI) said the UK’s financial services had the “most aggressive regulator” in the world.
“Yet in spite of that, we have a situation where we add more standards on top of that in order to make our consumers feel safe,” Sinclair said.
He said it was an “interesting conundrum” that on top of existing regulatory standards, the sector went above and beyond that.
Sinclair said the negative of this was it proved a “huge responsibility on [advisers] because what you effectively do is gold plate everything and create an incredibility high standard for yourself that you have to live to.
“You have to live it and adhere to it. The majority are really good at it, the problem is others aren’t.”
Sinclair said the later life market did not have the same “rinsing out” of bad advisers as the mainstream market did, referencing the 2,000 intermediaries who exited the market between 2012 and 2014 due to poor behaviour.
Standards of the past
Tish Hanifan (pictured), co-founder of the Society of Later Life Advisers (SOLLA) said she and joint co-founder of the organisation James Gardiner helped the Financial Conduct Authority (FCA) to develop its regulations for the market in 2004.
She said: “My reflection on that is when we wrote those standards, we were writing for the market we had at the time.”
Hanifan said the innovation created through product development, as well as standards set by SOLLA and ERC, meant there was a “massive change” in equity release and the later life market.
She said these additional standards were necessary because she still came across some negative views of equity release on social media relating to their original launch in the 1980s, indicating that “the consumer has a long memory”.
Hanifan added: “The regulatory regime as it is – the consumer can’t wait for those changes. They want them, they need them, but right now how does the consumer find people that can help them with later life lending?”
Hanifan said this was her reasoning for setting up SOLLA, to give consumers confidence and connect them to “good advisers” who were following a recognised set of standards.
She also said removing siloed advice could improve outcomes for borrowers.
“When people come to see advisers, what they want is for their problem to be solved. They are not interested in why an adviser is limited in the advice they give or why they didn’t consider certain options,” she added.
