Mandatory Face To Face Advice For Equity Release

Face To Face Advice Returns For Equity Release

A temporary amendment to equity release rules, which had been in place since April 2020, ends today.

The Equity Release Council, which regulates the later life mortgage market, has confirmed that from today, all customers considering an equity release product will be required to have at least one face-to-face meeting in person with a solicitor before taking out a plan that meets the council standards.

Independent legal advice is one of the “core consumer safeguards” in the modern equity release market. All new customers have been required to go through this process since 1991, when the first industry standards were launched. The face-to-face requirement was added in 2013.

David Burrowes, chair of the Equity Release Council, commented: “The temporary amendment to our requirement for face-to-face legal advice served its purpose well by protecting customers and maintaining their access to vital funds in trying circumstances.

“The Council’s unique ability to bring together firms from across the market helped to identify a practical solution whereby customers were not cut off from money tied up in their homes, which in some cases was key to accessing care services when they most needed them.

“While restrictions have ebbed and flowed during the pandemic, we are hopeful the worst is now behind us. The time is right to return to the default of in-person legal advice while learning lessons about how technology can best support the overall process and customer experience.”

While under current rules, all firms offering equity release products must offer you advice, that advice does not have to be independent nor does it need to be face to face.

An equity release product is a significant decision and not one to be taken lightly. Many financial advisers have used technology successfully over the last two years to keep this market alive, especially enabling other members of the family to take part in the discussions.

I would argue however that the face to face requirements should be extended to receiving financial advice, and that the advice received should be independent.