Experts have warned that equity release could be a ticking compliance time bomb for brokers new to it.
Julie Alderson, director at compliance consultancy Management Solutions 2000, compares equity release with pensions and endowments, saying it could be years before the market sees the effects of inappropriate advice.
She says: “Many brokers are looking for additional revenue but equity release is a compliance time bomb.
“It’s a high risk product and Financial Services Authority research shows some brokers don’t know how to help clients understand its effect on taxes, long-term care or benefits. If they are unclear, they should steer clear.”
Nigel Barlow, head of retirement solutions at Just Retirement, says: “Many brokers are becoming qualified to sell equity release but should refer clients to experts if they are uncomfortable.”