The Equity Release Solicitors’ Alliance (ERSA) is issuing an alert to advisers to be fully aware of the new legal safeguards introduced earlier this year, the Mortgage Finance Gazette reports.
The legal requirements introduced on January 1 this year by the Equity Release Council mean that all solicitors must arrange a face-to-face meeting with customers during the advice process, and that customers must sign the solicitor’s certificate.
This has presented a new way of working for many advisers and solicitors, providing enhanced protection for consumers and has been widely welcomed.
But ERSA is concerned that as the market experiences strong growth, intermediaries who do not advise on equity release regularly or are new to it, may not be fully aware of the requirements.
Recent industry data from the Equity Release Council shows that the equity release sector has experienced soaring levels of business this year, with over 10,000 new customers in 2014 so far, and £641.2 million of plans written in the first half of 2014, a record level and 34 per cent increase on 2013.
Claire Barker, chairman of ERSA, said: “The new requirements have tightened up the advice process for clients and advisers, providing greater certainty and peace of mind for both, something that is essential for a financial product that is potentially used by a client for two decades or more.
“The requirement for customers to not only meet with a solicitor but also sign the solicitor’s certificate adds an extra layer of safeguarding and should reduce potential disputes at redemption.
“Eight months into the year, we believe that advisers and solicitors are getting used to the new requirements but we are concerned that as the market expands rapidly, and new advisers may be entering the market for the first time in a while or at all, that all advisers are reminded about them.
“Advisers and solicitors both play a vital role in ensuring this and by working together using the standards set by the industry body The Equity Release Council, the continued success of the sector will be assured for homeowners and intermediaries.”