Two thirds of equity release advisors not up to scratch
August 17, 2009
It has been claimed that around two thirds of equity release financial advisors are not up to scratch, and are letting down the many pensioners that are turning to them for advice in the current climate.
In the current climate a rising number of pensioners have been turning to equity release, so that they can release capital from their property whilst times are hard, but it seems that the majority of the professionals that are there to provide them with advice and assistance are not offering them good advice.
The shocking figures came to light after a mystery shopping exercise, which was carried out by the consumer campaign group Which?. T
he exercise found that two thirds of equity release advisors did not pass all of the benchmarks for offering good advice. Forty advisers were tested in total, and only one third passed all the tests. The results also showed that out of the twelve specialist equity release advisors that were tested only five passed all the benchmarks.
Those that failed the tests did so in a variety of areas. Some did not carry out fact finding exercises before recommending an equity release product to a consumer, and some even failed to find out what sort of income the customer had, which is necessary to determine what sort of income boost is needed.
Officials have said that finding the right equity release deal is vital, as there can be a different of thousands of pounds between programmes, which is why the sound advice of a professional is needed.
Some of the advisors failed to warn consumers about the negatives, such as how quickly the debt could grow. One official from Which? said: ‘One IFA said there was no chance of using up all the equity in the ‘customer’s’ home ‘unless you live to 150′.’ Another official from the group added: ‘If you’ve been hit by plunging pensions, it might be tempting to release some much-needed money using your home. However, opting for an equity release plan is a big decision and it’s not one that should be taken lightly.’
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