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Equity release brokers must qualify or lose out, warns KRS

Key Retirement Solutions has called on equity release brokers to act now and get qualified to advise on home reversions or risk being caught out when regulation starts on April 6.

Safe Home Income Plans has already stated that after August 1 its members will only deal with advisers who have gained a qualification – approved by the Financial Services Authority – in home reversions.

Dean Mirfin, business development director at KRS, warns that advisers who fail to act now risk being left out in the cold.

He says: “There are a lot of advisers selling lifetime mortgages without any qualifications. If they do not take an equity release examination now they may find themselves unable to sell home reversion products.”

Mirfin believes regulation will dispel any doubts about home reversion that potential customers may have.

He adds: “Too many brokers do not try to sell reversions, which may be better products for customers.

“They argue that it is not regulated and paint a negative picture of it purely because they don’t know enough about it. Regulation and education can stop this.”

As the equity release industry develops in 2007 with tighter regulation, some have called for high street lenders to enter the fray and help develop customer-friendly products and initiatives.

Duncan Young, managing director of Retirement Plus, thinks high street lenders could change the face of drawdown schemes.

He says: “One of the problems with drawdown is the lack of flexibility. It is greatly affected by rate changes and lenders attach too many conditions to it.”

He adds that if consumers were given drawdown chequebooks, down-payments could have annual caps and products would be freed from the strict conditions they have now. If costs could be controlled, the high street could change the face of such products.

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