Society of Mortgage Professionals responds to the FCA regarding equity release

“The areas where the FCA expressed concern were often around advisers not challenging clients’ requests robustly enough, and not recording a client’s decision in their own words, using all the options open to them – for example, voice and video recordings.”

“We accept that with the development of greater professional standards, there will be higher expectations around advisers refusing to act as order-takers, and around advisers using more innovative ways to record clients’ decisions in their own words. However, we should not underestimate the challenge to advisers that is implied by these expectations: advisers can challenge, but they will also be aware that the client has the final decision over what to do with their own assets, and advisers can do more to record clients’ intentions, but they often have little certainty over what expectations adjudicators and supervisors will have in terms of evidence in ten years’ time, or even longer.”

“As a result, we would like to work with the FCA to ensure that expectations for advisers are as clear as possible, and that incentives in the wider environment don’t make the challenge of giving good advice even harder. For example, benefit rules around paying for long term care create incentives for some people to save for care, while also creating incentives for other groups to spend their assets early so they can qualify for means tested benefits. Giving robust advice to clients about managing their most important asset in this environment is far more difficult than it should be.”