Bridgewater is especially concerned by the Which? results regarding advisers’ understanding and lack of consideration of home reversion plans. Which? has expressed ‘disappointment’ that almost a half of all the 40 advisers it visited either didn’t mention, or dismissed out of hand, home reversion plans. Home Reversion Plans are one of two regulated equity release products along with Lifetime Mortgages and should be actively considered by all advisers in any provision of equity release advice.
Alison Beeston, Compliance & Communications Manager at Bridgewater Equity Release, commented: “We are disappointed with the results of the Which? research particularly the lack of adviser consideration for home reversion plans. While we are not surprised that some advisers ignore or dismiss home reversion plans, we are surprised at the significant numbers Which? found who are not providing, at the very least, generic information about the products.
“As a home reversion provider we have come across varied misconceptions about the plans themselves and we would urge advisers to make concerted efforts to understand the products and provide relevant information to their clients. In order for the adviser community to avoid further criticism of this nature, and to ensure they provide the right advice and recommendations, advisers must actively consider the plans in any discussion of equity release. We recognise that home reversions are not suitable for every single customer. However they may be appropriate for those looking for the reassurance of knowing, up-front, the total proportion of equity they have given up and/or the security and certainty of knowing there is equity left for their beneficiaries or themselves in future.
“Bridgewater distributes exclusively through advisers and we are committed to providing educational support to all those involved in the equity release sector. We would urge all those advisers looking for home reversion information or training to contact us for help.”
Not one of the 40 advisers visited by Which? recommended a home reversion plan, six didn’t mention them at all and 13 dismissed them without an adequate discussion about why they might be unsuitable. Which? also says many of the advisers were either ‘misinformed’ or ‘resorted to scaremongering’ when it came to home reversion plans. For example, some advisers told Which? researchers that, with a reversion, they have to sell 100% of their home which is not true; 14 advisers did not explain or didn’t explain properly that a customer would have to sell at below market price with a reversion plan.
Bridgewater run an ongoing series of regional broker forums aimed at providing advisers with tangible support and information about home reversion plans, their place in the market and their suitability for potential clients. The next Broker Breakfast Forum takes place in Southampton on the 8th September.
