Simret Samra: What can advisers expect to get from SHIP’s membership expansion?
Andrea Rozario: Advisers will have an involvement they have never had before. Our primary goal is to help grow the equity release market safely, but also to bring together all of the different factions from advisers to solicitors and providers through to anybody that has an interest in the market.
We will be looking to extend standards across the industry, so there will be an application process and standards that need to be adhered to.
We also have to accept that this is a regulated industry and there are standards already out there for advisers, so we are not looking to put up obstacles for them. All we are trying to do is bring everyone together under one banner.
However, the new organisation that we are looking to launch does not necessarily mean that every other organisation, including the Equity Release Solicitors Alliance (ERSA), has to go by the way side.
We are not there saying that you can’t be a part of other organisations if you join us, because that makes no difference to us.
Will SHIP advisers be accredited and what will they get for their subscription?
We won’t be offering an accredited program.
As we are launching as a representative organisation that is pulling together all these different parts of the industry, we can’t go out with too much, too soon because we wouldn’t be able to deliver on those promises.
What we want to do is help people recognise that this is the first step to something that the industry has been calling for for many years.
What we want to do is ensure that we speak as one voice and that everybody has the same goal, which is to grow the market, so that whatever we do is consumer-focused.
The relationship between equity release and funding retirement has been significant this year. How much more work do you still have left to do to persuade the government to promote equity release to pensioners as a retirement solution?
We have noticed that equity release has climbed up the political agenda. It has been referred to in the Dilnot Review, by the Department for Work and Pensions and the Treasury.
All of the drivers around equity release, such as the age of the population, credit crunch, house price inflation, all point to more and more people looking to use all of their assets in a better way.
If downsizing is not an option or there are other options not available, then clearly equity release has got to be on the table. We’ve still got a lot more work left to do with the government, but we are making large strides.
With the baby boomer generation reaching 65, how long do you think it will be before we see more lenders offering flexible retirement solutions?
While innovation is always welcomed in the market, over the past year, we have seen four or five members come back to the market with some good flexible products.
If you look at our products and what is available today in terms of flexibility, we are probably the most sophisticated equity release market in Europe right now.
However, there are building societies pulling niche products out of the market because the FSA views equity release as risky.
There are funders that are probably thinking that they don’t want to invest in an area where they are not quite sure what is going to happen with regulation.
One of our aims for next year is to lobby the regulator and ensure that we make regulation as transparent as possible so that companies and organisations can make decisions as to whether they feel operating in this environment is conducive.
There is still a bit of a stigma attached to equity release. What can the industry as a whole do to help raise awareness of the safeguards in place in the equity release market?
There is a lot we can do to represent the industry and put forward the message that equity release is safe.
To get this message out is going to take a considerable amount of time, because we are trying to overcome a legacy that has damaged the industry and, more importantly, what has happened recently in the financial services industry that has rocked confidence across the board.
What we can do is ensure that the products that are on the market are safe, that the advisers are conscientious as they have always been and that we try and ensure that people have got the consumers’ best interests at heart.
