Colin Taylor, managing director of KRS commented: "We identified that advisers who only transact two or three equity release cases a year should be referring them to a specialist as they are unlikely to have the systems or controls in place to offer suitable advice. Having recognised this need in the market place in 2005 we launched our ER referral service - Key Partnerships."
Commenting on the findings of the mystery shopping exercise, Clive Briault, managing director of retail markets at the FSA, said : "There is no place in this market for firms that do not develop the necessary skills and do not implement appropriate systems to ensure that they give suitable advice. We expect firms to commit to delivering quality advice or to refer the business to firms that have done so".
Taylor added: "We applaud the FSA for stating their views so strongly. We are aware of firms who really don't know what they are doing when it comes to equity release and firmly believe that they should not be allowed to continue offering this dangerously substandard advice. However, we are pleased that the FSA has given credit where it is due - singling out the excellent standards and the commitment to improving the industry specialist equity release firms have shown.
"While we are pleased to see that standards have improved slightly from those evident in early 2005, we feel that the industry has a great deal of work to do before all equity relelase advice provided in the UK is at an acceptable standard. KRS and a number of major equity release providers will be announcing a major new initiative at the end of July, which we believe will help to raise the standards of advice within this market."
