Equity release kiosks are a bad idea

Last week I wrote about the need for the mortgage market to open its eyes to the potential of IT. But this must not be done at the expense of the quality of advice. The last thing the market needs is for borrowers to be disadvantaged by firms looking for short-term commercial gain.

I say this in light of the recent announcement by Retirement Plus that it is looking to pilot touch-screen kiosks in supermarkets to give shoppers information on their equity release options.

Making information on financial products more readily available is a good thing, but should we be offering such information through kiosks at Tesco? The worry is that such machines may end up offering what appears to be advice to po-tential clients by leading them through scripted questions.

The idea that machines could be used in this way seems fraught with danger and may lead consumers to think they have fully researched the market when they’ve done little more than scratch its surface. Equity release is a complex issue. Only by engaging with professional advisers and going through the particulars of each case is it possible to come up with solutions that fit clients’ circumstances. Problems could also occur if shoppers are re-quired to provide personal information on ki-osks when it’s difficult to know who’s looking over your shoulder.

Those considering equity release products are often among the most vulnerable borrowers. Offering information in supermarkets would seem to be taking advantage of this situation and placing such clients in an even more vulnerable position. It seems that the kiosks are designed to raise the profile of the industry rather than cater for the needs of its clients.

The equity release market has endured its fair share of problems in the past and has done sterling work to improve its reputation by offering better products and safeguards.

But by introducing the mooted system, Re-tirement Plus would risk much of that goodwill. Even though it says the service would only offer information, in reality it could cut out the brokers who are central to the future success of the sector.

There’s a lot that IT can do to improve the speed, accuracy and efficiency of the equity release market, but is offering information to shoppers as they pick up their weekly groceries one of them?