The assessment is tech-enabled and has been launched with Equilaw to assist conveyancers and solicitors involved in the transaction process on an equity release case.
The assessment will help firms to determine if a borrower may be lacking in mental capacity and could protect brokers and lenders from future claims related to any suspected failures.
Comentis – which last year was enlisted by In Partnership for vulnerability assessments – said that, with the introduction of Consumer Duty last July, the importance of assessing clients for signs of vulnerability had been identified in the mainstream mortgage sector.
However, it said the later life lending sector needed support with mental capacity, as it was a “discrete and important” aspect of potential vulnerability. The firm said this could be hard to detect due to assessments involved and the related product options.
Jonathan Barrett (pictured), CEO of Comentis, said: “Assessing mental capacity is a complex process. Not only this, but we are seeing an increasing number of capacity-related claims coming through in the equity release space. Given this increase, it’s vital that mental capacity is correctly assessed, to protect all those involved.”
He added: “What makes this issue even more pressing is that while the industry is broadly aware capacity must be assessed, there seems to be confusion as to where that responsibility lies – the broker, the solicitor, or the lender. Frankly, this is an issue that everyone must understand. The implications of getting it wrong are going to be felt all round. This ground-breaking new assessment will help with that process, and benefit both the industry as a whole and the end clients.”
Claire Barker, CEO of Equilaw, said: “A hugely important part of our role is to advise homeowners on the risks and rewards of products recommended by their financial adviser, explaining how everything works and ensuring they fully understand what’s involved before they proceed.
“With that in mind, we strongly believe our partnership with Comentis to better assess mental capacity will reassure financial advisers, providers and our mutual clients that the best possible care has been taken in enabling our clients to make an informed decision when making a serious and long-term financial commitment.”
