The regulator also reminds firms to improve their advice processes
The Financial Conduct Authority (FCA) has conducted a review of later life mortgage firms, which led to the removal or amendment of almost 400 misleading promotions.
The regulator also reminded firms responsible for around half of all lifetime mortgage sales to improve their advice processes, as it found that, in many cases, advice did not meet the standards expected.
Firms involved in the review have been directed to make significant enhancements in their processes to ensure advice is personalised and shows consideration of customers’ circumstances. Customers who think they were poorly advised can complain to the firm and, if they are dissatisfied with the response, can bring the issue to the Financial Ombudsman Service.
According to the FCA, later life mortgage products are often sold to customers with a higher risk of being in vulnerable circumstances, so it’s essential these customers are fully informed and receive suitable advice.
“Releasing money tied up in your home later in life is a big decision and can have a financial impact on consumers and their families well into the future,” stated Sheldon Mills, executive director of consumers and competition at the Financial Conduct Authority.
“Our review led to the largest later life mortgage firms making improvements to their sales and advice practices, and almost 400 promotions have been removed or amended where firms have identified issues with them.
“We expect all firms to assure themselves they comply with existing rules and guidance and higher standards under the Consumer Duty.”
Jim Boyd, chief executive of the Equity Release Council, expressed support for the regulator’s engagement with the lifetime mortgage sector.
“We share the regulator’s commitment to putting customers first and ensuring they are fully informed and advised about their options,” Boyd said. “Its findings will inform our ongoing standards-setting work to help raise and reinforce best practice consistently across the sector.
“The Council and our members are undertaking significant work to reinforce advice standards and ensure clear customer communications. We wholeheartedly support the new Consumer Duty, and will continue to work with the regulator, members and wider industry to take every opportunity to improve customer experiences.”
Leon Diamond, chief executive and founder of later life lender LiveMore, also welcomed the FCA’s report into the lifetime mortgage sector, which, they acknowledge, “highlights practices in the industry that deserve the regulator’s attention.”
“We published a white paper in June, highlighting why Consumer Duty is good for the industry, and as a solutions-led lender, we abide by the rules and welcome them with open arms,” Diamond said.
“Anything that improves the industry for the good of the consumer can only be a good thing and this report from the FCA is a strong reminder for every broker and lender to put the customer first.”
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