FCA has published the results of its review into how the equity release market is working for consumers.
The review found that equity release can be an attractive option for some consumers, and that it is working well for many. But is is concerned that:
- advice does not always take proper account of consumers’ personal circumstances;
- consumers’ reasons for considering equity release were not always challenged by firms; and
- firms could not always evidence that the advice they gave was suitable.
FCA was disappointed to see evidence of a form-filling approach to something that should be deeply personal, and found some files that contained standard generic text to justify why customers didn’t want to consider alternatives to equity release.
Following the review, FCA has engaged with firms it was concerned about and plans a more detailed follow up review into the suitability of advice in the lifetime mortgage market. Meanwhile it wants firms to ensure their advice processes are sufficient, taking account of MCOB and the points above.