What Safeguards Are in Place for the Consumer?
Many people considering a large financial decision such as equity release can be concerned about the consumer safeguards in place to ensure that they are protected. The equity release industry is actually highly regulated and represents some of the most regulated of all the financial products in the UK.
There are a number of consumer safeguards which have been established to ensure that consumers benefit from safe and reliable financial products. These consumer safeguards include:
1. All advisors must be qualified
Every single equity release advisor must have specific qualifications allowing them to advise on equity release schemes including lifetime mortgages. There are two exam bodies which provide specific qualifications for this industry. The Certificate in Regulated Equity Release is required by the Institute of Financial Services and shows as the CeRER after the advisor’s name. The Chartered Insurance Institute requires the Certificate in Equity Release which shows as Certs CII (MP & ER) following the advisor’s name.
2. All Providers should be members of the Equity Release Council
The Equity Release Council is a trade body which focuses specifically on the equity release industry. They set guidelines and represent lenders, advisors, legal representatives and other administrators associated with equity release. All lenders which offer equity release products and schemes should be a member of the ERC and be subject to their codes of conduct and regulations.
3. Solicitors should be au fait with the equity release process
Another of the consumer safeguards is that solicitors representing your interests should be au fait with the equity release process. Ideally, the solicitor should be a member of the Equity Release Solicitors Alliance. This is a body of specialist solicitors who concentrate on equity release and are all members of the ERSA are vetted by the organisation.
4. Compensation is provided by the Financial Ombudsman Scheme
Since the equity release industry is regulated by the FCA, this means that it is under the remit of the Financial Ombudsman scheme. The Ombudsman is authorised to investigate complaints and provides compensation of up to £50,000 if there is a viable case of poor advice being provided.
5. A cancellation period
There is a cancellation period allowed within any equity release product. At any time up to the signing of the mortgage deed, the client can make the decision to cancel the agreement and not proceed. However, this option may incur costs depending on how far the arrangements have proceeded.
Making a large financial decision such as deciding on an equity release scheme can be a little daunting. However, there are significant consumer safeguards in place to assure that you receive the best possible scheme for your requirements and needs. Each case is assessed by your equity release advisor to ensure that it is there are no better alternatives and that you are aware of the restrictions or limitations on the specific scheme before you proceed. If you have any concerns about committing to an equity release scheme, you should discuss them with your equity release advisor.