The Equity Release Council has published a Best Practice Guide to complement its checklist for advisers and support firms when discussing and documenting customer needs.
The guide has been produced by the council’s standards board, drawing on decades of experience from expert adviser members representing a variety of firms in the market.
The guide encourages advisers to respectfully and robustly challenge clients’ motivations, in order to identify a solution that best fits their short, medium and long-term needs.
It was designed to ensure consumers receive a high-quality and personalised service from their advisers and so that case files capture sufficient details.
In addition, it supports advisers to gather soft facts and record customers’ use of language to show why the advice and any product recommended is suitable for the individual circumstances.
The guide complements the recently expanded 24-point checklist for advisers and follows a review of the council’s rules and guidance to confirm they are in line with the regulator’s latest thinking.
Together the two documents are designed to promote consistent advice for consumers and help advisers to satisfy regulatory requirements and the council’s additional standards.
Chris Pond, chairman of the Equity Release Council’s standards board, said: “As a standards-setter with almost three decades of experience, the council continuously reviews and evolves its guidance for members to promote the highest standard of consumer protection.
“This new Best Practice Guide will be a valuable resource for new and experienced advisers as they seek to provide personalised advice to consumers and document their conversations.
“Our standards are based on extensive consultations with members and input from external parties, including the regulator.
“We support the FCA’s efforts to ensure all customers receive suitable advice on their options in later life.
“Our checklist for advisers and Best Practice Guide help to ensure a wide range of factors are explored in depth to identify the most appropriate way forwards to meet each customer’s long-term needs.”
Sara McLeish, chief executive of Legal & General Financial Advice, added: “The equity release sector has transformed in recent years, with more choice, better rates and improved consumer protections.
“Equity release is now becoming more of a natural choice for many planning retirement and is a valuable tool that enables people to enjoy a much fuller later life.
“The continued raising of standards has been fundamental to this shift, so I am delighted to see the Equity Release Council continue to drive improvements across the market by launching its Best Practice Guide.
“We are acutely aware that many households find themselves in financial difficulty due to the COVID-19 pandemic and we know, from our own research, that this has left many people re-thinking retirement plans.
“Some of these people will see equity release as a potential avenue to release much-needed funds, to supplement their income, or to support family members hit by the crisis.
“However, it is important to keep in mind this is a product designed to last a lifetime, not to meet a short term need.
“The Best Practice Guide, alongside the recent ERC checklist, is a vital resource for advisers, helping them to provide high-quality and consistent advice to all consumers, which is in line with regulatory requirements and the council’s additional standards.
“It is vitally important that the industry continually strives for consistent, accurate and robust advice so that all customers, particularly those who are vulnerable, understand the implications of borrowing in later life.”