The guide is designed to help firms focus on what they can do to improve their standards where necessary on lifetime mortgages. Recommendations include creating a specialist lifetime mortgage training programme; ensuring advisers are mindful of the impact releasing equity can have on a client’s entitlement to benefits and grants as well as on future options.
The regulator has also urged those firms not up to speed with practices to review its systems and controls, in particular for providing Initial Disclosure Documents or when advising on subsequent investment or rainy day funds. Calls were also made for advisers to ensure they are aware of all new products.
Jayne Almond, managing director at Stonehaven, said: “The FSA’s factsheet builds on its report into the lifetime mortgages market last year and highlights concerns over those who merely dabble in the sector. While those clients at the upper end of the scale who use equity release for Inheritance Tax purposes may be less of a concern, complications arise at the lower end where State benefit entitlements come into play. This is where specialism is a priority and must be addressed.”
Rob Griffiths, associate director at AMI, confirmed that a standing committee had been set up to highlight any concerns in the equity relelase market. He said: “The equity release standing committee meets up every two months. A trade body focusing on equity release was discussed, but dismissed and this working group enables us to talk about the issues with no deadline, unlike a working group.”
“The priorities going forward include making information clearer, and the standing committee invited representatives along from Age Concern to its meeting to discuss any changes.”
