The chairman of the Equity Release Council said that people would benefit more from face-to-face advice, while clearer documentation such as suitability reports would help to give the “best possible advice and service”.
Mr Waterson said the ERC had updated the code of conduct for its members, adding: “These additions to the council’s rules and guidance will bring customers even greater comfort as they explore their financial options in later life.”
He said the additional safeguards included a rule that means adviser members must present every customer with a suitability report to clearly show the reasons why a particular product had been recommended.
Mr Waterson added: “A combination of outside regulation and self-governance helps to ensure customers are fully informed of their options and in the best possible position to judge how to make their finances work in retirement.
“With incomes squeezed and non-existent returns from many savings accounts, this often means bringing their property wealth into play – the largest asset that many over-55s have at their disposal.
“Equity release product rates have recently improved in line with market conditions, and while they are differently priced than residential mortgages, this reflects the greater commitments from lenders to protect their borrowers against the threat of negative equity.”
The ERC has 300 members since its relaunch in May 2012.
Provider members must make a copy of the ERC’s code of conduct available – either directly or through the council’s website – to anyone who takes out an equity release loan.
Adviser members must give clients a suitability report that clearly sets out recommendations.
Independent legal advice must be given face-to-face by a qualified professional as an added safeguard so that consumers fully understand any loan they take out.
Claire Barker, chairman of the Equity Release Solicitors’ Alliance, which comprises seven legal and financial advisory firms, said: “Making customer contact face-to-face can only be a good thing for legal advice in equity release. It adds an extra personable level to the process and is another safeguard for people making such a big financial decision.
“The focus on specialist advice from solicitors and financial advisers is vital to ensuring that people are making the right decision and fully understand the implications.”