Advisers will be only too well aware that the chances of a transaction being delayed, anytime from when the client gives the go ahead to the time they either get the keys in their hand or the money in their account, are all too prevalent in this line of business. With so many parties active within the ‘chain’, all with different priorities, it seems all too easy for deadlines to be missed and the resulting frustration can steadily build providing sleepless nights particularly for the client and their representative.
While technology has gone a long way to speeding up the process we are still reliant on human beings actioning demands, processing paperwork and essentially getting the whole thing moving. Indeed, in a wider sense, sometimes initiatives which are designed to eradicate the delays that can exist often only put a further obstacle in the way. Home Information Packs, anyone?
Objections
The process for equity release products is no different. Indeed, one of the objections often raised, particularly against home reversion plans, is that the transaction can seem to take a long time to complete. However, in trying to get to the bottom of why advisers perceived reversions to take that much longer than lifetime mortgages we uncovered a factor which can produce overly lengthy cases. Namely, the inexperienced solicitor.
Now of course every case will be dealt with by a solicitor and one of the key tenets of the Safe Home Income Plan (SHIP) code is that a client’s legal work will always be performed by the solicitor of their choice. As the Code continues: ‘In all cases, prior to the completion of the plan the solicitor will be provided with full details of the benefits the client will receive. The solicitor will be required to sign a certificate to the effect that the scheme has been explained to the client.”
Absolutely nothing wrong with this and we would not wish to lose this key protection for the client. However, the problem comes with the solicitor that is chosen and their experience of the equity release market. Many customers may well have family solicitors who they trust and have used for many years. The point is that these firms may not be the best to use when it comes to an equity release case given they may not have dealt with these types of plans before and therefore may not completely understand them as well as the client (and everyone else involved) may like.
Working knowledge
Inexperienced solicitors who are not equity release specialists can often be the cause of much delay when it comes to processing the case. It is a simple fact that those solicitors, who do not have a working knowledge of equity release, find themselves outside their comfort zone when presented with a case. If this is the case then they are much more likely to procrastinate over the case which inevitably leads to delay. We have also found that those solicitors who are not au fait with equity release and the working knowledge it requires often decide to put it to the bottom of their ‘to do’ list again slowing down the whole case.
A recent example of the problems that can be caused by clients opting to use inexperienced solicitors was presented to Bridgewater recently. We received a message from a solicitor asking for an extension to the offer we had issued on the basis that they had only just picked up the case to read and time had passed to such an extent that the offer had only one more week before it was due to run out. This obviously places the client in a precarious position, one which they have done nothing to contribute to apart from the fact that they have used this particular solicitor.
It is for these reasons that we suggest the use of experienced solicitors who have the specialist equity release skills and knowledge to be able to deal with the case quickly and effectively. This is obviously a sensitive issue for advisers to broach especially as the client may always use a particular solicitor for their legal affairs and be loathe to change now. However, advisers do need to gently suggest that the client opts to use an experienced solicitor if they feel the client’s original preference may fall into the ‘time insensitive’ bracket. The last thing the client should want is to use a solicitor that has to learn the job on their case and the resulting delay this may cause – advisers should not be afraid to point this out.
ERSA
Solicitors who work within the equity release sector are acutely aware of the damage and delay their inexperienced colleagues can cause. This is why we were pleased to see the recent formation of the Equity Release Solicitors’ Alliance (ERSA) – a group of six solicitors (Equilaw, Goldsmith Williams, Ashfords, Lees Lloyd Whitley, Gwyn James and Birchall Blackburn) have formed the body to make sure advisers have access to specialist equity release legal firms.
The ERSA has acknowledged that many solicitor firms are wary of equity release cases believing them to be costly and taking a long time to complete. ERSA firms however are committed to the sector and have a great deal of experience dealing with the cases. All six founding firms are ‘adviser friendly’ and know the market inside out which is of great benefit to both customers and the market as a whole. Advisers who understand where delays in the process can be triggered may well wish to advise their clients not just on which products might be suitable but also which solicitor firms will help them get to their end goal in the quickest possible time.
