Two-thirds not advising on equity release
The findings, highlighted by AIFA’s February IFA census, showed 57 per cent of these brokers who did not offer equity release products said compliance was the main factor behind their decision.
However, the continuing lack of qualified advisers on equity release was also a major factor, with 36 per cent of respondents citing this as a reason.
Chris Cummings, director-general of AIFA, said: “Equity release is a viable financial solution for people who fulfil a certain criteria, and can be used as a way of mitigating inheritance tax. However, we recognise it is quite a unique field and needs sensitive handling.”
The survey also revealed three-quarters of those who offer equity release products refer the client to a third party.
However, understanding of the product is still a problem, with 9 per cent of advisers questioned saying they did not understand it, while another 9 per cent claimed they did not understand the regulation governing its sale.
Cummings added: “We know how hard people work to generate new business leads and their desire to offer their clients a full spectrum of ‘life solutions‚’ so we understand it must be frustrating for those who have to refer clients to a third party for equity release advice. That said, this shows the maturity of the industry as is prepared to refer clients to other sources for specialised advice.”
David Mead, director at Flexible-mortgage.net, said: “There is a lot of fear about compliance and the way we’ve tackled it is to have two fully-qualified advisers backed up by our network. We’re cautiously optimistic about the future but lenders have got to be offering attractive products that work, and there needs to be the people qualified to advise.”