Equity Release 

FCA admits more equity advisers needed

FCA admits more equity advisers needed

The Financial Conduct Authority would support additional training to help get more financial advisers able to advise on equity release.

Speaking on 22 November, FCA director of life insurance and financial advice Linda Woodall said the regulator wanted to see more innovation in retirement income products, including equity release.

“I think that the release of housing equity has a place in retirement planning,” she said.

However, she accepted that reluctance of advisers to participate in the market was barrier.

“In terms of why there’s a shortage of advisers, I’m not sure that I really know the answer that. I think it may be a reluctance from the population.

“I think we should support additional training where that’s called for. And clearly we just need to say that advice is key in that conversation. And in fact with equity release it’s pretty much mandatory,” she said.

She added that the FCA was open to lifting regulations that prevented the development products that were in the interest of consumers.

As proof that she was serious about this, Ms Woodall pointed out that the FCA had "recently implemented the consent modification for equity release products, which is an example of the FCA removing regulatory barriers to promote or facilitate innovation”.

Ms Woodall’s comments came as part of an update of the FCA's ongoing Ageing Population project, which is examining the provision of financial products for older people, particularly over the age of 80.

These included ensuring older people were offered alternatives to digital access to their finances, “new ways of allowing release of housing equity”, and readier access to credit.

On the latter, she said: "We’re also actively dispelling myths and inaccurate perceptions of barriers in our rules, for example, assumptions that firms are not permitted to consider pension income as part of a mortgage affordability assessment; or that the mortgage conduct of business rules prevent lending to older consumers full stop.

“Our position remains that firms are able to lend to all credit-worthy customers, including older ones, provided that they do so in a responsible manner.”

She said the FCA had commissioned an independent study on the “ageing mind”, looking at how psychological traits in old age influence financial behaviour.

Ms Woodall said the FCA hoped to publish the findings of it Ageing Population project in the summer of 2017.

David Stealey, a financial planner at Romilly Financial and specialist in equity release, said it would be a "lovely thing" to see more advisers advising on equity release.

He said advisers were probably put off by the increased regulation of the area - though he added this fact meant advisers could charge more for the service.

Regarding the FCA's call for more innovation in the area, he said this was probably in part a response to the fact that there was a large number of people entering retirement with mortgage debt.