Each week the mystery shopper seeks advice from independent advisers in the UK. The aim is to find out whether advisers are delivering when it comes to the all-important initial telephone contact between client and adviser. It is only intended to evaluate this first interview, and it is understood that further meetings would be necessary before final decisions could be made. The purpose is not to expose poor selling practices, but to constructively show any weaknesses in the advice process.
This week, the mystery shopper visits Sheffield, in South Yorkshire. The shopper is calling on behalf of her father who is 62 years old and wants to release equity of about £50,000 from his property. He wants to use money to go on a worldwide trip and pay off his car loans and credit cards. His property is worth between £500,000 and £550,000 and he has an outstanding mortgage of £100,000.
Adviser (independent): Pace Financial Management
Address: 200 Ridgeway Road, Gleadless, Sheffield, South Yorkshire S12 2TA
Speed of response (time of call): 10.15am. One ring then put through to an adviser. 5/5
Telephone manner: Helpful and friendly. 5/5
Key qualifications: CeMap and ER1. 5/5
Payment method: First meeting is free. If the shopper’s father wanted to proceed with equity release application there would be a flat fee of £595. 5/5
Guidance: The adviser said her father was old enough to be eligible for equity release, but to consider if there would be enough money left to do what he wants. Typically, equity release providers provide funds that make up 24 per cent of the total value of the property. If that is about £120,000 to £132,000 (24 per cent of £500,000 to £550,000) after paying off the mortgage balance, this would leave £20,000 to £32,000. The adviser said the older he gets, the more providers are likely to lend. 4/5
Knowledge: The adviser appeared to be knowledgeable, but only spoke about equity release products and did not suggest any alternative options. 3/5
Verdict: The shopper felt the adviser was very knowledgeable about equity release. However, her father is quite keen to take a trip soon and doesnot want to defer it, so would have liked options.
Adviser (independent): Polaris Wealth Management
Address: 45 Tylney Road, Sheffield, South Yorkshire S2 2RX
Speed of response (time of call): 10.35am. One ring then transferred. 5/5
Telephone manner: Polite and friendly. 5/5
Key qualifications: ER1 and CF6. 5/5
Payment method: First meeting is free. Charges for remortgages are a £295 fee. With equity releases it is hard to predict as it is paid as commission. 4/5
Guidance: The adviser told the shopper that while considering the equity release route her father should also consider if a remortgage would be a better option. This is because at 62 years old he is still quite young and could pay off his mortgage by the time he is in his 80s and still be able to leave a decent pot of inheritance to his children. Taking into account his earnings and future pension, he might be able to get more favourable terms with his mortgage. 5/5
Knowledge: The adviser was knowledgeable about various options. However, if the shopper’s father wanted equity release he would refer him as it is not something he advises on regularly. 4/5