Advisers warned against ‘dabbling’ in equity release

Advisers warned against ‘dabbling’ in equity release

Advisers who dabble in equity release run the risk of facing compliance problems, analysis from Key Partnerships has claimed.

The analysis showed nearly 700 smaller firms completed just one case of equity release during 2014.

In 2006 the then-FSA raised concerns about low-volume firms “dabbling” in the equity release market and suggested that those IFAs doing so should reconsider their involvement in it.

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Will Hale, director at Key Partnerships, said approximately 1,500 firms completed fewer than one equity release case a month in 2014.

“Advisers need to be aware of the potential regulatory pitfalls of only occasionally offering equity release as a solution,” he said, adding: “This could mean they are not whole of market and run the risk of unintentionally not offering clients the best service.

“A great deal has changed in the equity release market in recent years, with new products and rates that may not be revealed using traditional mortgage sourcing systems.”

He recommended that advisers could outsource their equity release cases.

Adviser view

Peter Rylott, a Cheshire-based adviser with The Right Equity Release, said: “I would agree with Key Partnerships’s comments about compliance wholeheartedly. The speed with which this industry changes makes it quite dangerous to do just one case a year without the relevant research and continuing professional development.”