The Association of Mortgage Intermediaries has published detailed guidance notes for intermediaries on advising and arranging equity release products.
The objective of the notes is to assist firms who are considering entering this growing market to understand all aspects of the advice process, regulatory requirements and legal considerations.
For those already in the market it can be used as a cross-check to identify any areas which may be being overlooked or not given adequate attention.
The notes, which include a list of contacts and sources of information, cover both lifetime mortgages and home reversion plans, which become regulated by the Financial Services Authority in April this year.
Home reversions currently represent a very small percentage of the equity release market but following regulation the number of providers and prominence of reversion plans is expected to increase.
AMI urges its members to ensure they are fully conversant with this product if they are to offer comprehensive independent advice.
Rob Griffiths, associate director of AMI, says: AMI is committed to helping those members active in the equity release market and is aware of the opportunities available to members advising and selling in this sector.
We have therefore produced these guidance notes which will be of help to those members either looking to enter this market or already advising clients.
The equity release market is seen as high risk by the FSA as it believes there is a greater chance of consumer detriment if firms processes are not of the highest standards.
The FSA has already conducted two reviews of the sector and in the last review we were pleased to see improving standards from intermediary firms.
These guidance notes have been designed to help firms further improve the quality of their advice in this area.
Our support for our equity release adviser members can also be evidenced by the formation of an Equity Release Standing Committee, made up of industry practitioners, legal expertise and key industry personnel.
Our Standing Committee meets for the first time next week and will provide AMI and AIFA with policy guidance and support to deliver information to members on the equity release market and ensure they reach the highest advice and sales standards.