66 per cent of equity release advisers fail Which? mystery shop
A mystery shopping exercise study carried out by Which? has revealed that a shocking 66 per cent of equity release advisers failed its benchmarks for providing suitable advice.
Which? investigators visited 40 advisers providing equity release advice as part of its research. This was broken down between 28 Independent Financial Advisers (IFAs) and 12 specialist equity release firms.
Of the 12 specialist equity release firms including Age Partnership, Aviva, Home & Capital Just Retirement, Key Retirement Solutions and Prudential, just over 41% passed the Which? mystery shopping exercise. Of the 28 IFAs just over 28 per cent passed the test.
Which? said that 23 advisers failed to even complete a fact-find. This is a document used by advisers to record details of a consumer’s personal and financial documents, and should form the basis of any advice given. Some advisers failed to adequately explain how the equity release scheme would work including how quickly the debt would grow or discuss the effect of compound interest. One IFA told a mystery shopper that there was no chance of using up all the equity in the customer’s home “unless you live to 150”. Nearly 50 per cent of the advisers failed to discuss or dismissed out of hand home reversion plans.
Which? commented that its findings clearly indicated that there is significant room for improvement in the equity release advice process to ensure that consumers are receiving suitable advice.
