I have a vested interest, as the representative of many broker firms that recommend equity release, but who has not been engaged in the detail of the new plans. So part of what may follow is from ignorance, but certainly not from apathy on my part.
My concern for this new entity is that I am unsure how it will prioritise its various roles and more important, how it will be a democratic organisation reflecting the diverse views of its proposed widened membership.
By all accounts it is not cheap to become a full member and that might be a pre-requisite to a seat at the top table.
In pursuing its diverse objectives who will decide the strategic direction and control delivery?
Also whose interests will take priority; consumers, lenders, the SHIP standards, brokers or perhaps the wider national interest?
I see the following as within the new Council’s proposed compass:
· Promoting equity release with politicians and regulators
· Maintaining SHIP standards
· Operating a disciplinary process for those who breach the new standards
· Protecting lender interests
· Protecting broker interests
· Working with solicitors and valuers to deliver a safe product
· Moving equity release to be a core part of at retirement advice
· Promoting equity release to consumers and the media.
While SHIP was all about lenders and standards, the new organisation has expanded its constituency to broaden its voice, but also to fund what it thinks it needs to have the right voice. All of this is the correct thing to do, but the broad approach risks it lacking focus. 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?
Equity release is a regulated product via the Financial Services Authority. It sets the rules on how the product can work and be sold. We pay a lot of money for them to get this right. I am not sure I want another body setting more rules and standards that can be used by the Ombudsman and courts to set much higher standards. Because these will be seen as industry led, these higher standards risk being applied to all in the industry, whether members of the new council or not.
Having submerged the SHIP and kept the anchor, we risk all being dragged along by a lot of well-intentioned but financially led compromises. It will require some deft and articulate leadership to balance these competing priorities and interest.