Equity release is fully regulated by the Financial Conduct Authority (FCA) - all of our plans meet the Equity Release Council standards, offering additional protection. There are also a number of important qualifying criteria and relevant time limits to consider when making a complaint, and these are summarised within The Councils Complaints and Disciplinary Process which can be accessed at: https://www.equityreleasecouncil.com/documents/complaints-and-disciplinary-process/. It is therefore essential that providers make it clear, in their product literature and contract terms, what is or is not acceptable under their definition of long-term care. The complainant should explain to us the impact that the actions of the member/ERC have had on them. In addition to the provisions in 4.1 (2) (b) above, lifetime mortgage products must also meet the following criteria, which should be included in the provider’s contract terms: Members may wish to note that the term “best price reasonably obtainable” is not the term generally used by professional surveyors, who use the term “market value” in accordance with the rules published by the Royal Institution of Chartered Surveyors. These are generic payments, designed to publicise the law firm’s services in the hope of receiving a non-specified number of referred customers. Typically, this is added to the loan balance as ongoing repayments are not expected to be made on equity release plans. In particular, the customer should receive independent advice in the absence of any intended or potential beneficiary, to avoid any duress being exerted by such a person on the customer(s). Throughout the drawdown process, the equity release market aims to ensure money is released to customers, or their appropriate representatives, who can demonstrate comprehension, capacity and make fully informed decisions, whilst in full consideration of their firm’s embedded financial crime, vulnerability, data and capacity policies and always adhering to responsible lending rules. It was created to promote safe equity release products and to safeguard the interests of homeowners. Members of the Equity Release Council have to abide by a Code of Conduct that guarantees that our ethics and standards. This detriment could include both financial and non-financial detriment which typically covers distress, inconvenience, pain, suffering or damage to reputation. In all cases where further independent legal advice is deemed necessary a new. You can read more about the Equity Release Council below. The Equity Release Council has updated its industry standards in what it says is the largest evolution since the organisation was established in 2012. The Equity Release Council (ERC) is an expansion of what was previously SHIP (Safe Home Income Plans) and represents those who work in the equity release sector. All methods and systems are assessed for their vulnerability to fraud or error. The organisation said the changes represent the largest evolution in standards since they were established in 2012. Members of this Council can only say they meet all these standards if all of these are met. An alternative property will be deemed suitable if the plan provider would normally issue a new plan on it to a new customer at the time of the move. Look at practical ways to validate that the drawdown is for a legal and legitimate purpose. The benefits and limitations of the plan will be clearly set out, together with your obligations under the terms of the contract. Customers can therefore check when they could switch provider without incurring penalties. contact all customers who are referred to them for advice by provider members with the aim of qualifying the need for advice. In any circumstances where a third party is present, the Solicitor should satisfy him- or herself that this is at the request of the customer, that the request is reasonable, and that the third party’s presence and purpose in being present is clearly documented. Such circumstances might include, for example, where a customer requires help to hear or understand what is being said or does not speak English as a first language and requires assistance from an interpreter. These are applicable to both provider and adviser members as cohorts in the end to end process and are therefore both in some part obligated to understand the entirety to ensure full understanding of the standards being set. Version 0.12 was approved by the Standards Board on the 10th September 2019 and by the Main Board on 23rd September 2019. If someone has a complaint about one of our members, they must firstly complain to the member concerned, using that member’s published complaints procedure. Where the provider is aware of any other person being resident at the property who is not party to the contract, it is considered good practice that such person(s) should also be advised to take independent legal advice to ensure they understand and accept the implications of the customer proceeding with the equity release plan. The Advising Solicitor will report to the customer, setting out the legal risks and rewards of proceeding, based on the offer which has been issued by the provider. For a home reversion plan you (or both of you, if you’re taking out a plan jointly) need to be at least 60 years old. Incorporating SHIP (Safe Home Income Plan) standards is all about making Equity Release safe for you. The Council’s standards set a best practice benchmark by providing a higher level of consumer protection than […] Before the plan is completed, your solicitor will be provided with full details of the plan, including the rights and obligations of both parties (you and your product provider) under the contract, should you choose to go ahead. Members should pay due regard to customers’ best interests at all times, minimising the risk of detriment by regularly evaluating how policies and processes continue to deliver consistently fair outcomes; (a) Where applicable, there has been a full discussion as to the implications of the plan for the customer(s) and for their family, and that the customer(s) was (were) made fully aware of such implications. And to add another layer of accountability, all our advisers at Bower are specialists in retirement lending. If the new property is of insufficient value to secure the amount owed to the provider, any partial repayment will be limited so that the net amount remaining due shall not be less than the percentage of the property value that the provider would advance to a new customer in comparable circumstances. The independent legal advice provided should include (but is not limited to) the risks and rewards associated with the equity release product recommended by the Adviser and also the customer’s ongoing obligations under the contract. 5.1 Whenever a provider member introduces a new product, or materially varies an existing product, a Certificate of Compliance with the Product Standards must be completed and submitted to The Council. 6.4 Guidance for Provider members – Members should: 6.5 Guidance for Adviser firms – Members should: The following non-exhaustive list sets out appropriate MI that member firms should consider implementing to monitor the quality and performance of their drawdown processes: Where possible firms should share this information with the Equity Release Council to inform future revisions to the Drawdown Standards. FCA MCOB rules require that the adviser retains a copy of a record explaining the reasons for recommendation (considered here as the Suitability Report) for at least 3 years. 8.1 Meeting the customer – requirement for a face-to-face meeting before completion of the initial contract. Equity release refers to a range of products that let an individual access the equity tied up in their home if they are over the age of 55. Could be an indicator of emerging or heightened vulnerability such as reduction/loss of income, savings, commitments, bereavement and existing debt, Could be an indicator that the customer has not fully understood the implications of the original contract, or possibly not been advised correctly or is being subject to some coercion by a third party, Dependant on the reasons given some might conflict with the provider’s terms (e.g. Both you and your solicitor will be required to sign a certificate confirming that these rights and obligations have been explained to you and that you wish to enter into the plan. All Members are required to complete and submit, on the anniversary of their admission as members of the Council, an Annual Certificate of Compliance with these Rules & Guidance. rapid use of the drawdown facility; large amounts being drawdown; drawdowns requested with a considerable time elapsed since initial advance), Customers who have little or no drawdown funds remaining, Number of customers being referred for support, mental capacity, coercion, advice, legal advice and the outcome. Consider the provision of a customer application process at the outset that effectively capture the anticipated drawdown usage, such that this can be compared with actual usage during the term of the plan. Options include discussing and potentially sharing the original suitability report and the Key facts illustration, and the Attorney taking financial advice themselves to equip them with the same level of information as to the original customer. Where any factor appears to be significant, or more than one factor applies, consideration should be given to whether it would be prudent to recommend to the customer that further independent legal advice is taken. Giving advice on a home reversion plan or lifetime mortgage is a regulated activity under the Financial Services and Markets Act 2000 and anyone carrying out such an activity must be appropriately authorised by the Regulator. 3.2 Provider members should not accept business unless they have taken reasonable steps to satisfy themselves that adviser members have followed these rules and guidance. bereavement, divorce, redundancy or unemployment; is unable to recollect previous borrowing; has dementia or other health issues that is impacting their understanding; due to a life event is distressed or confused; is acting without the knowledge of a joint customer; is under the influence or coercion by a Third Party; A record of the information provided is kept, so that it can be clearly demonstrated that each of the points contained in the Adviser Checklist has been fully covered, Where information is given over the telephone, the identity of the customer being spoken to has been verified, Where there are joint applicants, each has been given the required information, Records are kept in such a way that they are easily retrievable, and an effective audit trail is maintained. Our Rules & Guidance incorporate a number of documents which set out The Council’s requirements and expectations of its members. Ensure the drawdown process complies with their business’ policy for personal sensitive data that explains to customers how this will be recorded, used, stored and shared, Develop a referral process for situations where advice at the point of a drawdown may be necessary and can be provided within the right circumstances. For a lifetime mortgage you (or both of you, if you’re borrowing jointly) need to be at least 55 years old. It could also arise if any element of the product were so complex as to be difficult for a customer to understand. The outcome of this contact (whether advice was provided or not) should be shared with the Provider. (The death of a customer is a point where early settlement charges are suspended on many products). Whether there have been any significant changes to the customer’s circumstances such as: divorce and/or remarriage or co-habitation, a member of the family or a friend coming to live with the customer(s) (son/daughter/grandchild/other family member/friend/companion), any significant change to the customer’s physical or mental health, a Power of Attorney having taken effect since the original application, a family member or professional carer attending regularly to give care, or living in the property and what, if any, access to/control over the customer’s financial affairs such a person might have, the provider/adviser is made aware of particular circumstances which are peculiar to an individual customer. The Solicitor who gives the customer independent legal advice about the contract should therefore be able to make this judgment, but if the Solicitor does not know the customer well, or has any doubts about the customer’s mental capacity, a medical certificate will usually be sought. In some cases, providers and advisers may consider that it would not be prudent for them to continue with the case unless they had made such a recommendation. In addition to the MCOB requirements set down the by the FCA there are also industry standards. “Allowing people to access some of the savings built up in the value of their homes could help fill the increasing gap in retirement incomes and long-term care costs, but people must have confidence that they will be treated fairly if they consider this option, which is why the maintenance of the highest standards of consumer protection is so essential. 7.2 The Council considers that it is best practice to give a customer seeking advice on equity release a written record of their advice and recommendation. We would encourage Provider firms to notify Adviser firms (and vice versa) if they are made aware of trigger points or life events. It is also recognised that not all factors included in this list indicate a risk and that the list is non-exhaustive. This means all of our plans come with several assurances, including the no negative equity guarantee. The Standards Board is incorporated as part of the Equity Release Council and exists to ensure that equity release products are safe and reliable for consumers. We live by the high standards that the Equity Release Council sets for products and services. The Council also considers it very important that the customer should signal receipt and acceptance of the Suitability Report. The Equity Release Council has updated its industry standards in what is being called its largest evolution since it was established in 2012. (1) Customers must have the right to remain in their property for life, or until they move into long-term care, provided the property remains their main residence and they adhere to the terms and conditions of the contract; Provider members’ definitions of “long-term care” may vary. You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan (Equity Release Council standard). 8.3 The Solicitor (whether this is the Advising Solicitor or the Agent Solicitor) who meets the customer face-to-face is required: (a) to witness the customer’s (or Attorney’s) signature on any documents which are required to be executed as deeds, (b) to verify (insofar as they are reasonably able to, acting with all due diligence). The following list sets out some of the main elements of activity that may emerge. The Certificate confirms that the Advising Solicitor has drawn the customer’s attention to the risks of entering into an Equity Release product. The Equity Release Council has released a new set of updated industry standards aimed at ensuring higher levels of consumer protection. All Rights Reserved. The FCA’s Mortgages: Conduct of Business (MCOB) Rules refer to the customer’s “health” – which The Council interprets as meaning both physical and mental, including the customer’s capacity to enter into a legal contract. The outcome of this contact (whether advice was provided or not) should be shared with the provider subject to customer consent, Ensure that all customers entering into a drawdown plan understand the need to manage their cash reserve responsibly. 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