Two-thirds of IFAs do not currently advise their clients on equity release products because of concerns over compliance and a lack of training, new research reveals.
The Association of Independent Financial Advisers (AIFA) February IFA Census, claims 57% of respondents cited compliance and a major reason for not advising on equity release products, while a lack of advisers specifically qualified to advise on equity release was a reason given by 36% of those in the survey.
Nearly three-quarters of IFAs who discuss equity release with clients refer them to third parties, with the remaining 25% referring clients to another adviser within their firm.
Less than 10 % of advisers said a lack of understanding of regulation or of the products was the reason they didn’t advise clients, with 31% disliking the products available and 12% finding clients didn’t like the concept of equity release.
Chris Cummings, director general of AIFA says, “Equity release is a viable and constructive financial solution for people who fulfil a certain criteria, and can be used as a way of mitigating IHT. However, we do recognise that it is quite a unique field and needs sensitive handling. We are therefore working to increase adviser’s understanding of the market by publishing our step-by-step Viewpoint guide to Equity Release, and keeping them up to date with equity release developments on our member-dedicated web page.
“We know how hard people work to generate new business leads and their desire to offer their clients a full spectrum of ‘life solutions’, so we understand that it must be frustrating for those who have to refer clients to a third party for equity release advice. That said we believe this is the right thing to do, and shows the maturity of the industry if it is prepared to refer clients to other sources for this sort of specialised advice.”
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