Am I Protected Against Poor Equity Release Advice?
For many people considering an equity release scheme, they can be a little overwhelmed by the variety of products and services available. Many people worry about whether they are receiving the advice which is best suited for their needs. A great number of people have heard of the Financial Services Ombudsman, but don’t understand how it can provide protection for them.
Equity Release in the Past
When equity release products were first introduced into the financial industry, they were considered expensive and many people had bad experiences, making costly mistakes. Simply because of these early days, the equity release market is still frowned upon by some. However, the industry has come a long way and there have been a number of protections which have now been established to ensure that consumers receive the correct advice for them.
How You are Protected
Now, all equity release schemes are subject to the rules and regulations of the Equity Release Council. This is a trade body which was established to ensure the protection of consumers. Since equity release affects not only an individual but also their beneficiaries, there are a number of precautionary measures to ensure that it is the correct option, which is not required for a conventional mortgage product. These precautionary measures require additional paperwork to ensure compliance including documentation detailing the limitations and implications of the equity release product, which requires additional administration and research. The FCA ensures that all advisors comply with the mandatory regulations and the Financial Services Ombudsman can become involved in any complaint.
Not all brokers and financial advisors can provide advice about equity release. There are now compulsory qualifications for all equity release advisors. This restricts who can provide advice and broker equity release schemes. For example, many mortgage advisors and general financial advisors may be accredited to provide advice on conventional mortgages but they cannot broker an equity release scheme.
What if You Receive Poor Advice?
There is a set complaints procedure established by the FCA and you can also appeal to the Financial Services Ombudsman. There is a compensation scheme established for anyone who has a legitimate complaint about receiving poor equity release advice. The Ombudsman will become involved in complaints and there is compensation of up to a maximum of £50,000.
If you are concerned about having received poor equity release advice, you should contact your broker or the Financial Services Ombudsman. They will follow the set complaints procedure and investigate the matter fully on your behalf.