Equity release market failing to adapt?
A follow up mystery shopping campaign of the sector is currently taking place, but an industry source has told Mortgage Introducer the initial findings are poor. “From dialogue with the FSA, the current mystery shopping exercise is, worryingly, revealing the same problems it did last year with some firms failing to act on original guidance given,” the source said.
Dean Mirfin, business development director at Key Retirement Solutions, called for the FSA to thoroughly examine firms originally targeted as part of its mystery shop. He said: “From what I understand the mystery shopping is still ongoing. Last time there was concern that the mystery shop was not indicative of the equity release market, as it did not survey enough firms, but this time the FSA has stated it will be conducting a much larger campaign. The FSA must go back to the firms that were mystery shopped to see if improvements have been made. That is the only way to judge whether improvements have been made.”
However Mirfin admitted the need to review the ‘know your customer’ ruling. “‘Know your customer’ is a very broad rule. Although some of it is within rules and part of it embedded within ‘Treating Customers Fairly’, part of it is up to the firm to ask questions they feel they need to. On one hand we don’t want the FSA to dictate to us, but on the other we need to know exactly what to expect. I know various trade bodies are examining this.”
Robin Gordon-Walker, spokesperson at the FSA, confirmed its mystery shop was currently taking place, with the results likely to be announced in late May