Scottish Widows Bank is being forced to revamp the execution-only equity release mortgage product it distributes with Saga, the service provider for elderly people.
The product was launched last summer but from October 31, when the FSA starts regulating lifetime mortgages, this type of delivery will be outlawed and people must receive advice.
Scottish Widows Bank business development director Gordon Bowden says: “We realise the product will have to change and are in discussions with Saga about it. We are also working closely with the FSA. We always recommend that customers see an IFA.”
Scottish Widows has been unable to become a member of Safe Home Income Plans, the body which promotes responsible lending in the equity release market, because of its execution-only product and the fact that customers are not required to seek independent legal advice.
SHIP chairman Jon King says he welcomes the scrapping of execution-only. Speaking at a Prudential round table discussion last week King described it as “an absolute no-no”.
Specialist IFA Key Retirement Solutions business development director Dean Mirfin adds: “There is no way we would do execution-only as it relies on the client to make the right decision.”