At AskERIC, we are committed to always giving unbiased advice to everyone who reaches out to speak to us. After all, releasing equity from your home is a huge decision that will impact the rest of your, and your families lives.
A recent update to the Equity Release Councils (ERC) checklist for advisors brings extra safeguards to all individuals who are considering equity release as a way to finance their retirement years. As the popularity of equity release plans increases year on year, they want to ensure that everyone who speaks to an advisor gets the best advice, and for that advice to be tailored to their personal circumstances.
We are happy to say that we already have a reputation for always delivering honest, expert advice to anyone who contacts us to enquire about equity release. We take pride in building trusted relationships with both our customers and their immediate families, helping them navigate the process and find the very best solution for their future. You will always be treated as an individual, as we endeavour to learn about your personal circumstances and dreams for the future.
An additional 12 points have been added to the ERC checklist, which all members are required to complete when advising prospective customers. These new points cover a range of areas which we will discuss below.
All ERC advisors are now required to make sure that prospective customers have fully explored all the other options for financing their future.
As soon as you contact us, we will assign you with your own personal advisor who will remain with you throughout the entire process. Whatever your reason for considering taking equity from your home, your advisor will ensure that you are aware of the risks, as well as the benefits. For example, they will make sure that you have considered options such as downsizing, re-mortgaging, and other means of borrowing. They will also ensure that you have claimed all the benefits that you may be entitled to, to see if the extra income could help support you. We want to ensure that equity release is the right route for you to be taking/exploring.
All advisors must now give detailed advice about the risks and fees involved.
Each of our advisors has years of experience and are industry qualified. Your advisor will make sure that you have a clear understanding of the way that interest gathers on your loan, including how this will affect the final value of your home. They will explain the fees associated with setting up your equity release plan, and potential early repayments charges should you be in apposition to redeem your plan in the future. They will also discuss anything else that might affect your plan.
Customers who wish to consolidate existing debts must be fully aware of everything that this entails.
If you wish to consolidate existing debts, your advisor will carefully assess your situation and make sure you understand how it would affect the overall amount of debt you have in the long term, as well as the risks involved if you can’t make your payments. Our approach has always been centred on getting to know our clients and understanding their attitude to risk, to help us give them the best possible advice.
Homeowners who decide to go ahead with an equity release plan must now be advised to update their will and consider seeking advice from a solicitor or qualified person if they do not have a Power of Attorney (POA).
This is an important recommendation that we always discuss with our customers, as the impact of not doing so could be detrimental. In the case of a joint mortgage, if one person suffered a loss of mental capacity, both would lose access to their drawdown facility. You can read more about why POA is so important in our guest blog post by Peter Barton; Head of equity release at Ashfords solicitors.
There is now a much sharper focus on working with vulnerable clients.
All advisors must now understand how to identify vulnerable customers and know how to help them. Examples of vulnerability include people who may have problems with their mental or physical health, are suffering from trauma, or have difficulties with literacy or numeracy.
This is increasingly important as more business is being done over the phone, due to Covid-19 regulations. By appointing each of our customers with a personal advisor, we have always made it a priority to build meaningful relationships with the people we work with.
The new checklist also adds safeguards to customers who are re-mortgaging.
Whether you want to move to a lower interest rate or to release capital, you will receive a detailed analysis of the features and benefits to compare your existing plan and the recommended new plan.
Greater protection and safeguards for customers.
There have always been safeguards in place to help protect your money when you take out an equity release plan. For example, the ‘no negative equity guarantee’ regulations mean that you won’t owe money if the value of your house is lower than the balance of your equity release plan. These new checklist points for advisors mean that customers have even more security.
However, the UK is facing economic struggles on a scale that we haven’t seen before, with the effects of Covid-19 and Brexit causing huge uncertainty. It’s more important than ever that you get rigorous advice from trained professionals before making any decisions about your financial future.
Since we founded our business in 1985, our business model has been based on our core value of ‘people over profit’. Each member of our team prides themselves on upholding traditional, moral values when advising our valued customers. We will always give you the right advice for your personal circumstances, even if that means that equity release is not the best option for you.
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If you’d like to discuss equity release with one of our advisors then get in touch for a free, no-obligation chat. We will give you honest, impartial advice.
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