Be Wary of Expensive Advisor Fees
When considering an equity release scheme, it is important to gather all the essential information in order to make an informed final decision. However, many people fail to consider the advisor fees when securing the best equity release deals. In fact, since many brokers allow the charge for their advice to be levied and added to the loan itself, many people give it little thought. However, since any added fees will attract interest that will be compounded this results in a considerable amount of money.
Why Does the Charge for an Equity Release Advice Fee Vary?
The equity release advice fee is set by the broker or advisor. Some specialist brokers offer a set fee of £500, while others offer the exact same lifetime mortgage scheme but charge a fee of £1,495. This represents a huge difference which can significantly affect your budget. The reasons for this difference could be attributed to the company’s structure, their profitability, their expenses or even the quality of the advice provided. However, it is worth considering that some of the best equity release deals for you may only be available through certain brokers. It is worth considering the whole deal when looking at the cost of the advisor fee.
Why is the Advice Fee So High?
Equity release schemes are overseen by the Equity Release Council. This trade body was established to provide consumer protection and ensure that consumers can make an informed decision on the best equity release deals for their circumstances. All advisors must comply with a number of rules which require additional paperwork including documentation detailing the limitations and implications of the equity release product. This requires additional administration and research which is reflected in the advice fee.
Investigate What the Fee Includes
It is important to be wary of expensive advisor fees; however, do not be tempted to make the assumption that cheaper is better. Some brokers offer free or reduced cost but there may be restrictions to their advice, including being linked to one specific company or a certain range of products. This may not represent the best possible option for your particular circumstances. Although advisors who do not charge a fee must still comply with the Equity Release Council’s consumer protection measures, they may not be able to offer a full range of products and services which would not allow access to the best equity release deals for your requirements and circumstances.
When considering an equity release scheme, the variety of available products and choice of advisors can be a little overwhelming. However, it is important not to base your decision on choosing an advisor solely on the cost of their equity release advice fee. It is important to assess whether the advisor can provide the best equity release deals for your specific circumstances. While you should be wary of expensive fees, you may find that paying a little extra on the advisor fee can save you a great deal in the long term. If you are concerned by any aspect of the fees or charges, be sure to discuss it with your advisor before proceeding any further.