The Equity Release Council has published a new guide to help its members communicate clearly and simply with customers in the later life lending market.
Developed with ratings agency Fairer Finance, it aims to provide customers with the best chance of understanding products and services and support them to make good financial decisions.
According to the National Literacy Trust, one in six British adults has a reading age of 11 or less and would fall short of the standard required to achieve a grade C English GCSE.
Meanwhile, Financial Conduct Authority rules have long since required firms to ensure their customer communications are “clear, fair and not misleading”. This obligation has been reinforced by the Consumer Duty, which obliges firms to prove their customers can understand their communications.
In addition, the Financial Ombudsman Service considers the readability of documents when deciding if firms have acted fairly or reasonably in the event of consumer disputes. And the Consumer Rights Act 2015 also emphasises the importance of using “plain and intelligible language.”
The new handbook is available to the Council’s membership of more than 750 firms and 1,900 registered individuals, including product providers, regulated financial advisers, solicitors, surveyors and other professionals involved in both consumer-facing and back-office roles.
While it is aimed at advisers, the Council says it will benefit many industry professionals. For example, the Solicitors Regulation Authority requires all solicitors to “use plain English and avoid complex language and technical terms.”
Members of the Council, the representative trade body for the equity release sector, can use the handbook as a practical toolkit when developing new communications or updating existing ones.
It covers the importance of using simple, jargon-free language as well as ensuring that documents are structured and designed in a way that is user friendly.
Jim Boyd (pictured), CEO of the Equity Release Council, said: “This guide builds on a cast iron commitment, that was enshrined in the very first equity release industry standards more than 30 years ago, to provide customers with fair, simple and complete presentations of information.
“With more features and flexibilities available on the market than ever before, it is vital that customers understand their options, so they are empowered to make informed financial decisions. This will deliver a lasting benefit to both customers and their families.
“Working with Fairer Finance to produce this guide will support our members to bring modern equity release products to life for customers in ways that are accessible, understandable and easy to digest.”
James Daley, founder and managing director of Fairer Finance, added: “It’s fantastic to see the Equity Release Council supporting its members to communicate clearly with their customers.
“Equity release is a complex product and it’s crucial that customers can understand exactly what they’re signing up to.
“Our guide provides practical advice which will make it easier for lenders and brokers to write, design and structure their documents in a way that is accessible for as many customers as possible.”