The code comes into effect on October 31 and will offer SHIP home reversion customers the highest possible level of protection until this part of the equity release industry comes under full FSA regulation. It will ensure that consumers and brokers can have full confidence in SHIP home reversion products.
Central to the code is the establishment of a complaints Board. The board will handle any home reversion consumer complaints that cannot be resolved by a member company and will be able to authorise compensation and fines of up to £25,000 for an upheld complaint. The
board chairman is John Hill, a retired former partner of actuaries Watson Wyatt, and the chairman of the Institute of Actuaries' Designated Professional Bodies Committee, which licenses and regulates actuarial firms. He has extensive experience of the equity release industry.
The board also comprises Bob Bullivant, deputy director general of CII and managing director of SOFA; Paul Smee, director general, AIFA; Mervyn Kohler, head of public affairs at Help the Aged; and Jon King, chairman of SHIP. The quality of the board underlines the strength of the
code of practice and the financial services sector's commitment to it.
The code will offer consumers and financial intermediaries a comprehensive schedule of advice that must be provided by IFAs and direct sales forces before a SHIP member company home reversion product can be purchased. The customer must confirm in writing that all steps in the
advice process have been covered. The SHIP member company providing the home reversion product will also be responsible for ensuring that both the advice has been provided and customer signature received before a sale is made.
Jon King, chairman of SHIP, says: “SHIP has been an active consumer watchdog since its inception in 1991 and is dedicated to raising sales and complaints handling to stringent new levels. The code of practice has been designed to bridge the gap until FSA regulation is introduced and we firmly believe that it will give great confidence in home reversions to both consumers and brokers. Since the FSA announced in May that it would eventually regulate home reversions, sales of the schemes have increased and I expect that the launch of this code will see the trend escalate.”
John Hill, chairman of the reversions complaints board, says: “I believe that equity release products are a valuable facility in personal financial planning, and that it is desirable that a full range of such products should be available. It is important that potential clients should be confident that equity release providers will adhere to high standards in the marketing and administration of their product. The creation of the complaints board is designed to give potential clients that confidence.”