The guidance was developed by a working group comprised of providers, funders, advisers and other industry professionals. Targeted to advisers and providers, it aims to assess the changing needs of borrowers and ensure their family members understand the process.
The guidance details trigger points for providers to get in touch with borrowers as well as regulatory requirements before taking additional steps, in order to ensure understanding and good outcomes.
This includes giving a product overview to the surviving applicant after the other passes away to remind them of the features of the product. The guidance also recommends a leaflet for family members so they understand why their relative may have taken equity release.
‘Increasingly important conversations’
Kelly Melville-Kelly, head of risk, policy and compliance at the ERC, said: “Equity release has traditionally been a long-term commitment, and while that remains true, the freedom and flexibilities of today’s products create more options for customers to consider over time.
“We have worked hard with members to look at how high standards of service can be continued long after the funds have first been released, considering changing circumstances such as the death of a spouse, enquiries about further advances or adding a new power of attorney.”
She added: “Equity release receives relatively few complaints and only a handful are upheld. However, a significant portion of those complaints are from family members, which is why we’ve included recommendations on how to support them too.
“It’s important that communications evolve along with the products to help older people and their families make the most of the products to live independent lives for longer and pass on living inheritances.”
Legal and General Home Finance welcomed the guidance.
Craig Brown, chief executive of Legal and General Home Finance, said: “As we move ever closer to the introduction of the Consumer Duty, lenders and advisers must act to deliver good outcomes for customers, as such, it seems obvious these conversations will be increasingly important.”
The full 17-page guidance is available here: https://www.equityreleasecouncil.com/wp-content/uploads/2023/05/Equity-Release-Council-post-sales-communications-May-2023.pdf
