Neither is there any truth in the rumour that I am working on an industry cartoon character called Stan Dards to help our members with their regulatory and compliance responsibilities, although if I see Stan appearing anywhere else I’m calling my solicitor.
The Association of Mortgage Intermediaries’ most recent contribution to raising standards in the intermediary market is its equity release guidance notes. These notes are aimed at firms already giving equity release advice or those that are considering entering this growing market.
The objective is to give members information on the advice process, regulatory requirements and legal considerations related to the equity release sector.
Those advisers who already operate in this market can use the notes to check against their advice and sales processes to help identify issues they might not have considered or perhaps not paid enough attention to.
For those firms yet to enter the sector, the notes outline the responsibilities and commitment needed to advise on and sell equity release products. This is an opportune time to be looking at this sector given that home reversion plans are due to be regulated by the Financial Services Authority from April 6 this year.
While home reversions represent a small percentage of the equity release market, regulation could bring an influx of providers and reversion plans.
Advisers must ensure they are conversant with the product if they are to offer comprehensive equity release advice, and this is why the guidance notes cover both lifetime mortgages and home reversion plans.
You might also recall that last year our intention was to set up an Equity Release Standing Committee within AMI and our sister trade body the Association of Independent Financial Advisers.
This committee would be a formal part of our organisation and would allow us to consider the issues surrounding the provision of advice and sale of equity release products.
It would also feed into our policy work with guidance and support to deliver information to members on the equity release market and ensure they reach the highest advice and sales standards. There’s that word again.
I’m pleased to say that the ERSC met for the first time last week. Topics under discussion included our priorities for the year ahead, a proposal to set up a directory of equity release advisers and the coverage of lifetime mortgages in stage two of the FSA’s Mortgage Code of Business Effectiveness Review.
The group is a mix of equity release industry practitioners, legal expertise and industry personnel and there is a considerable appetite to work with consumer groups and organisations such as Age Concern, to ensure full and clear information is passed to consumers on equity release products.
We were lucky enough to have a representative from Age Concern at our first meeting and we intend to continue this dialogue.
Equity release is a growing market and we know that many advisers consider it a business opportunity in 2007. But, it is a sector that needs investment, resources and research to enter. If you are interested in it, your first port of call should be our guidance notes.
To find them, visit the members’ area of the AMI website www.a-m-i.org.uk