More Education Needed For Equity Release Advisers

As the older generation look for ways to fund their retirements, more people have opted to release the equity in their properties. A new report has found that 88% of equity release advisers believed there should be more education and resources available on how to spot the signs of vulnerable adults or those lacking capacity.

According to the respondents, 53% view around 10% of their clients to be classed as vulnerable. When only 17% of respondents consider it easy to spot signs of vulnerability, it becomes clear that greater education is needed to avoid the unintentional exploitation of those that may lack capacity.

Currently, 87% of assessors review a client’s personal circumstances to establish whether they could be considered vulnerable. 82% also admitted to questioning their customers on the products, to establish understanding, before moving forward with the transaction.

91% of advisers looked for mental health as the main way to spot signs of vulnerability, with 88% looking for low levels of literacy, numeracy and financial capability. 56% considered poor financial circumstances as linking to vulnerability.

89% of advisers admitted that it is crucial to spot signs of vulnerability in a client, even if the client is unaware that a vulnerability exists. Additionally, 84% thought that discussing issues with close relatives could also be important in establishing capacity of the client.

In a time when professionals need to ensure that they are not complicit in exploitation to avoid reputational damage, 79% of recipients insisted that it is crucial to ensure that all communications are recorded. This includes an acknowledgement of how capacity in the client was considered by the adviser.

With compliance becoming a major issue, many have suggested that conferring and regulating a clear process through discussions with colleagues and regulatory bodies, in order to create consistent practice, would be invaluable. However, only 43% of those surveyed viewed this as a priority.

Stuart Wilson, corporate marketing director at more 2 life, said: “Whilst the majority of equity release advisers confirmed in our research that they were proactive in determining whether a customer was vulnerable or not, there is a clear demand for more education and resources to be provided.

“Advisers must be confident that they are not just able to recognise vulnerable clients, but also that they are fully equipped on how to communicate with them and manage their needs accordingly.”

Are you aware of any cases where a person has been exploited? What should be done to ensure exploitation does not occur in equity release matters?

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