Fully understand the customer’s current position and discuss how using Equity Release may effect their future options in a range of circumstances.
Carefully document your findings and clearly show why the recommendations made are the most appropriate for the client’s current and future needs. This will both help in the advice process and be a defensive position in the event of future doubt.
Be sure to fully explore all other options including the availability of grants, use of existing capital and downsizing. Provide a full explanation as to why each has been discounted.
Ensure that customer’s only release the absolute minimum they need to meet their planned spending
Unless the customer has genuine reasons for not doing so, recommend the involvement of other family members in the process and ensure they understand how a decision to proceed may impact on all parties
If a decision to proceed has been agreed it may be a good idea to obtain consent to provide the client’s solicitor with a copy of the fact find and the report and recommendations. This may save money for the client and potential stumbling blocks or delays in the process.
Providers that are members of SHIP give important customer guarantees, including the no negative equity guarantee and the permanent right to reside in the property. Many prospective customers understand the benefits SHIP provide and seek this ‘kite-mark’ for extra confidence.
Obtain copies of the SHIP Equity Release checklist, The FSA Factsheet Raising money from your home, and the Council of Mortgage Lenders Unlocking the value of your home- a guide to equity release. They provide clear unbiased information and guidance that will help the adviser and the customer alike.
Remember that to advise on equity release some advisers may be required to hold formal qualifications from as early as April 2007 and all sellers will need to be qualified by 2009. April is very close and 2009 is not as far away as it sounds!
Do not ignore equity release, even if you do not wish to make it a focus of your business. There are plenty of opportunities to refer potential customers to equity release specialists, let them handle the advice and compliance, and earn a share of any resultant sales. The FSA have recently been complimentary about the selling standards, practices, and procedures adopted by some of the specialist operators.
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