The regulator published its report into consumer awareness of the FSA and financial regulation in July.
Bridgewater has picked up on some key findings from the report which are relevant to brokers advising on equity release.
The research found that one of the groups least aware of FSA regulation was the over 65s, the same age bracket of equity release customers. It also found that those who had little or no knowledge of the FSA were also the consumers most likely to be cautious around investments.
Alison Beeston, compliance and communications manager at Bridgewater, says: “The fact that over 65s were one of the groups least knowledgeable about the FSA and regulation is a fundamental concern to Bridgewater given our customer base for home reversions tends to be in this age bracket.
“Advisers should not simply assume that regulatory knowledge is already there – it is important that all elements of regulatory coverage are communicated.”
Beeston says it is also interesting that there are a number of consumers who are risk-adverse. She says: “By opting for a reversion plan, clients will know exactly where they stand at the start of the process in terms of both cash received and the amount of equity they continue to own.
“It is up to advisers to fully explore the customer’s wants and needs and provide access to both reversions and lifetime mortgages if the equity release route is the one they wish to take.”