The Association of Mortgage Intermediaries says the Equity Release Council risks losing its focus by attempting to be a jack-of-all-trades.
Last week, Safe Home Income Plans relaunched as the Equity Release Council and expanded its membership criteria to include not just providers but also advisers, lawyers and surveyors.
The trade body hopes its rebrand and new structure will help to promote the sector and educate consumers looking to release the equity in their property.
It will be working with members to develop a new code of conduct and customers will be able to identify members of the council through its website.
But Robert Sinclair, director of AMI, says that the trade body’s broad approach risks it lacking focus.
He says: “Is this a standards body, a regulator, an industry promotions board or a trade body?
“More particularly how do all the various types of members have an effective and democratic voice?”
Sinclair points out that equity release is already regulated by the Financial Services Authority and introducing a fresh set of standards for advisers could confuse matters.
He says: “The FSA sets the rules on how the product can work and be sold. We pay a lot of money for it to get this right.
“I’m not sure that I want another body setting more rules and standards that can be used by the Financial Ombudsman Service and courts to set much higher standards.”
He adds: “Because they will be seen as industry led, these higher standards risk being applied to all in the industry, whether or not they are members of the new council.”
But Andrea Rozario, director-general of the Equity Release Council, says it has had a code of conduct for the past 20 years for its provider members which goes above and beyond the FSA rules and has worked well.
She says: “The code has helped clean up the industry and we are very proud of that.
“The fact that we are opening up membership means we can raise standards across the board, which is to the benefit of consumers. We have had a provider code for the past 20 years and now have advisers wanting to be part of this because it will be seen as a kitemark for the industry.”
Rozario says it makes sense for the trade body to dovetail all its different roles.