Teresa Fritz, principle researcher at Which?, revealed this morning at a discussion forum on the product, that the consumer group has started a mystery shop of both specialist and non-specialist advisers of equity release.
The study only began this month and so far only six advisers have been visited, out of a planned 40 visits to different advisers.
The full results will be published in August but she says the results of the six visits conducted have so far not been good. Along with an inadequate fact find, she says there has been very little discussion about the risks involved.
Advisers have also been anti-home reversions, choosing instead to steer Which?’s mystery shoppers to lifetime mortgage products.
She also criticises advisers as being hesitant, treating the initial meetings as a formal chat rather than a professional meeting.
Fritz makes the caveat that the study is still in its infancy, but she says, “it’s disappointing to see that the basics aren’t being covered”.
In response Andrea Rozario, director general of the Safe Home Income Plans group, says that anything that identifies weakness in the industry “we need to know about”.
But she adds: “No industry is perfect. What we want is not for everyone to be tarred with the same brush when these inadequate advisers and processes are found.”
Rozario also pointed out that the Financial Services Authority’s 2007/2008 Mortgage Effectiveness Review – which was a follow up to an earlier mystery shop into equity release – actually found positive results.
89% of consumers found it easy to find information and it found that advisers actually over-stressed the risks to clients.