Key carried out research and found that less than half of the advisers who responded – 45% – were very confident that they were fulfilling what was required of them.
Some 41% said they were quite confident about this, while 16% said they were slightly confident and needed to improve.
A further 74% of respondents said they were worried about meeting Consumer Duty and regulatory requirements, despite believing the later life lending sector had the potential to grow.
Key said advisers needed to offer clients a full range of options to ensure good outcomes and recommended call recording for all meetings with later life lending clients. The firm said this should be part of the Equity Release Council Standards and should be considered good practice across the market.
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How advisers are meeting requirements
The survey found that 32% of advisers had introduced mandatory call recording to improve quality assurance processes.
To show they were adequately considering all options for clients, 36% of respondents now give a detailed explanation of compound interest, while 37% are more open about the benefits of making some repayments.
Will Hale, CEO of Key Advice, said: “Clients should be advised of all their options under Consumer Duty if good customer outcomes are to be achieved. Advisers who are concerned about meeting Consumer Duty obligations should be aware that there is support available to enable them to be fully compliant.
“Regulators have set out what is needed from advisers operating in the market and Consumer Duty obligations have emphasised the need to deliver good customer outcomes through ensuring that clients are informed of all their options.”
He added: “Comprehensive conversations around what a customer may afford to repay to optimise cost of borrowing and or how health and lifestyle factors may positively influence the rate or loan to value (LTV) available are crucial if consistently good outcomes are to be achieved.
“Furthermore, advisers should see call recording as their friend. Modern technology allows this to be unobtrusive and recording calls is an efficient way of clearly evidencing a consideration of all options and can protect both advisers and their customers from future issues. Also, recording all meetings opens up other exciting opportunities to use artificial intelligence (AI) to drive efficiency and productivity benefits and to improve customer experience.”
