It aims to further enhance understanding and support good consumer outcomes
The Equity Release Council has introduced new guidance for advisers and providers to support their requirements under the consumer understanding and support outcomes of the Financial Conduct Authority’s Consumer Duty.
The guidance describes the various triggers for providers to communicate directly with customers and outlines regulatory requirements before recommending additional steps to further enhance understanding and support good consumer outcomes.
The 17-page post completion communications guide has been developed by a council working group comprised of providers, funders, advisers, and other industry professionals.
“Equity release has traditionally been a long-term commitment, and, while that remains true, the freedom and flexibilities of today’s products create more options for customers to consider over time,” Kelly Melville-Kelly (pictured), head of risk, policy, and compliance at the Equity Release Council, commented.
“We have worked hard with members to look at how high standards of service can be continued long after the funds have first been released, considering changing circumstances such as the death of a spouse, enquiries about further advances, or adding a new power of attorney.”
Melville-Kelly pointed out that while equity release receives relatively few complaints and only a handful are upheld, a significant portion of those complaints are from family members – the reason why they have included recommendations on how to support them too.
“It’s important that communications evolve along with the products to help older people and their families make the most of the products to live independent lives for longer and pass on living inheritances,” she added.
The process of taking out a new equity release product is one of the most detailed in retail financial services, involving both regulated financial advice and legal advice governed by statutory regulation and industry standards.
The wave of product innovation seen in recent years has created more flexibilities and options for people to take advantage of during their time as a policyholder. These include options to repay early with no early repayment charge after a fixed period of time or significant life event; make voluntary penalty-free partial repayments when they can afford to; or switch to another equity release product.
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