AMI warns of equity release mystery shopping
The warning comes swiftly after AMI declared exclusively in Mortgage Introducer that equity release is to be one of the biggest issues for the industry in the coming months.
Chris Cummings, director-general of AMI, urged intermediaries to be prepared. He said: “It is one of our biggest priorities to aid brokers and improve understanding and quality of advice in this sector. Enforcement is high on the FSA’s agenda and we, as an industry, have to work together to improve standards.”
While the FSA has highlighted progress has been made in addressing issues raised by work in early 2005 on equity release, it identified four priority areas including mystery shopping, assisting firms with meeting their regulatory responsibilities, a review of subsequent investment advice and a review of lifetime mortgage advice.
Dean Mirfin, business development director at Key Retirement Solutions, commented: “The FSA mystery shopping exercises underline how seriously the watchdog is taking equity release. 2005 saw the number of advisers fall. To remedy this the FSA should proactively encourage advisers to sell equity release in order to avoid market stagnation. But brokers moving into this sector must have a full understanding of the equity release market.”
The Council of Mortgage Lenders (CML) has reported a 3 per cent growth in equity release lending in the last three months of 2005. Michael Coogan, director-general of the CML, said: “Confidence will grow if all those selling equity release use the guidance available to be certain they have fulfilled all their requirements”