An undercover investigation conducted by Which? Magazine has found significant flaws in the quality of equity release advice, with two-thirds of equity release advisers failing Which?’s test
Posing as customers, Which? researchers visited 40 advisers and found that only a third of them met all the benchmarks for good advice set by Which? Overall, five out of 12 equity release specialists passed the Which? test, compared with eight of the 28 independent financial advisors (IFAs).
Advisers need to conduct a fact-find on each customer before they can give a suitable recommendation. 23 failed to carry this out to the expected standard and seven didn’t even ask about the researcher’s income
Some advisers didn’t mention how quickly the debt would grow or discuss the effect of compound interest. One IFA said there was no chance of using up all the equity in the ‘customer’s’ home “unless you live to 150″”