Consumers are losing out because of a shortage of specialist IFAs advising on equity release Safe Homes Income Plans (Ship) claims.
Ship says its members believe the most critical issues for the equity release sector in 2006 centre on IFAs.
The top issue, according to Ship members, is ensuring the full compliance with required regulatory standards for the sales process among IFAs. This is closely followed by the problem that there is a shortage of IFAs prepared to offer advice on equity release.
The reasons identified for the shortage of IFAs prepared to offer advice on equity release products include regulation, the longer sales process, a perceived "heavy handed" approach from the Financial Services Authority (FSA), the risks of mis-selling versus the rewards offered and a lack of education and awareness about equity release.
Ship says the shortage of advisers has significant implications for consumers, limiting growth of the sector and denying many clients access to quality advice on all possible financial options.
It says its members also feel a lack of specialised IFAs means major players will be allowed to dominate the market and that consumers will lose out on greater competition as a result.
Ship says more needs to be done to build confidence in the equity release industry and promote it as a mainstream financial product. It is calling for the FSA, Council of Mortgage Lenders and to work with it to encourage IFAs to specialise in equity release, raise awareness, improve training and review regulation regularly.
Jon King, chairman of Ship, says equity release is increasingly becoming a mainstream financial product but the lack of qualified advisers working in this area of the mortgage market is a source of great concern.
"The Ship Member Survey has identified how critical it is for consumers and IFAs to be made aware of the benefits of equity release. With home reversions due to come under FSA regulation as well as lifetime mortgages there has never been a better time to consider equity release," he adds.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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