The Equity Release Council exists to promote high standards of conduct and practice in the provision of and advice on equity release.
Our members will –
- Ensure that all their actions promote public confidence in equity release as a potential retirement solution
- Act at all times in utmost good faith
- Communicate high expectations for equity release outcomes in all their dealings
- Ensure conflicts of interest are managed fairly and reduced to the lowest practical level
- Exercise due skill, care and diligence in all that they do and uphold the standards set out by their professional bodies at all times
- Always act with the best interests of their clients being paramount, treating customers fairly in all their actions.
Our provider and adviser members comply with the Financial Conduct Authority’s (FCA’s) rules governing the sale of equity release products. These rules include the requirement that all customers who buy equity release plans are fully advised by a qualified adviser.
In addition, our members have voluntarily adopted further safeguards. These are set out in our Rules & Guidance (which are available on our website www.equityreleasecouncil.com/standards/rules-and-guidance/) and are designed to give you confidence in our members and their products and services. These further safeguards include product standards and a requirement for all customers to receive independent legal advice when taking out an equity release product.
Our product standards are set out below. Our members are only allowed to tell you that a product meets these product standards if it meets all of them. If you are offered or are considering a product that does not meet all of the standards, the product literature must explain which standards are not met, and give an illustration of the types of risk that this might pose for you.
Our product standards are as follows:
- For lifetime mortgages, interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan
- You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract
- You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan
- The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
Independent legal advice
You may choose your own solicitor to carry out the legal work in connection with your plan. Before the plan is completed, your solicitor will be provided with full details of the plan, including the rights and obligations of both parties (you and your product provider) under the contract, should you choose to go ahead. Both you and your solicitor will be required to sign a certificate confirming that these rights and obligations have been explained to you and that you wish to enter into the plan.
Information about and explanation of your equity release plan
You will be provided with a fair, simple and complete presentation and explanation of your equity release plan. The benefits and limitations of the plan will be clearly set out, together with your obligations under the terms of the contract. You will be given information about:
- all the costs that you will have to bear in setting up the plan;
- the tax implications;
- what will happen if you wish to move to another property; and
- how changes in house values may affect your plan.
Approved November 2014