Equity Release Council comments on FCA review of equity release advice

David Burrowes, Chairman of the Equity Release Council, comments on Financial Conduct Authority (FCA) review of equity release advice.

“The FCA’s report found that equity release is ‘working well for many consumers’ by helping to meet important social needs, from boosting retirement income to funding home improvements, repairs and adaptations.

“We will continue to work with members and the wider market to make sure this is a universal characteristic, by developing and embedding best practice standards which we would like all firms to sign up. For context, equity release makes up fewer than 2% of complaints about home finance products¹ and, of 38 complaints made to the Financial Ombudsman Service in the last year², only two were upheld.

“The combination of FCA regulation and Equity Release Council standards provides three levels of protection for customers, including independent legal advice alongside regulated financial advice and clear product safeguards. The requirement for customers to receive independent legal advice is unique among mortgages and helps to ensure customers understand the product and are under no duress or coercion to enter into the contract.

“It is vital that customers are supported to consider both long- and short-term needs when deciding whether equity release is right for them, as well as potential alternatives now and in future. The FCA’s findings will inform our ongoing work to support advice standards across the market.”

References: 

¹ FCA complaints data, H2 2016 to H2 2019

² ERC analysis of FOS complaints during the year to March 2020

Kindly shared by The Equity Release Council