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Advisers cannot just ‘dabble’ in equity release for extra cash – Star Letter 30/10/2020

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  • 30/10/2020
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Advisers cannot just ‘dabble’ in equity release for extra cash – Star Letter 30/10/2020
Each week Mortgage Solutions and its sister title Specialist Lending Solutions select the top comments from our readers in our Star Letter section.

 

This week’s comment came from Andy Wilson, who was responding to the article: FCA investigating lifetime mortgage fees over fears Covid-19 may increase unsuitable advice 

He said: “It is easy to understand the mind set of some advisers, who have been battered by low business volumes during lockdown, to view equity release as a potential cash cow.  

Who wouldn’t be attracted by commissions from lifetime mortgage lenders that can be more than five times the normal mortgage commissions, and higher client fees reflecting the additional work required? 

 

Empathy and understanding 

However, to be an equity release adviser requires an approach to giving advice that is empathic, honest, responsible and altruistic,” Wilson added 

You need to fully understand the potential issues around vulnerability, later life financial challenges, family involvement, alternative funding options and product features and options that can help your client in the long term. 

He continued: “Lifetime mortgage criteria can be very different to that of normal mortgages. The various sourcing tools can help filter out unsuitable products, but experience and a deeper understanding of what makes the lenders tick, how they are funding products and why they might say no to your client are vital to avoid the bear traps of later life borrowing. 

Also vital, in my view, is a desire to become very active in this market – you cannot just dabble and do a few cases a year. Knowledge is soon lost in a relatively fast changing market, and new products and options are emerging all of the time. 

 

Qualifications and industry support vital 

Wilson added: “If you are thinking of transitioning some of your role to that of an equity release adviser, passing the relevant exam is a small part of the journey.  

Engaging with the various support companies and lenders will help you to become a diligent and professional adviser, with credibility and trust taking a long time to build. 

 

 

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