Learn More. It has concluded that it would not be appropriate to make this a requirement in every case, but that Providers should make their own decisions, having regard to a number of factors and circumstances. 11.1     All subscriptions and fees will be fixed by the Main Board and that Board will have the power in cases where it should think sufficient, to waive all or any part of the subscription or fees, or any arrears thereof due from a member. The amount of the further advance in relation to the initial contract, for example, The further advance is larger than the initial advance; or, The further advance, together with the initial advance, would take the LTV of the combined loans above a percentage specified by the Provider in its Responsible Lending Policy, It may be that the cost of seeking additional legal advice would be disproportionate to the amount being sought by the customer, if this is relatively small, The period of time which has elapsed since the original contract was entered into, if the period of time is significant, it may be advisable for the customer to receive further independent legal advice to ensure they fully understand the implications of the new contract, Equally, however, if the period of time which has elapsed since the contract was entered into is relatively short, this could indicate either that the customer had not fully understood the implications of the original contract, or had not been properly advised, or could be subject to some coercion by a third party. 3.3(4) Section 6 details the rules and guidance for plans with a drawdown facility. Provider members should also consider informing adviser firms when a drawdown takes place, the purpose of the drawdown, and the amount. The Council is aware that the advising solicitor may also be part of the same group as the advising financial adviser, under common ownership. (The death of a customer is a point where early settlement charges are suspended on many products). 11.4     Any Member who fails to pay their subscription within three months of it falling due may be excluded from membership, unless the Board or Executive determines otherwise. Where the complaint concerns the advice or service provided by a solicitor or surveyor, it should be pursued first with the professional firm concerned and, failing an acceptable resolution, with the appropriate regulatory body, depending on the type of firm being complained about. The Council’s standards set a best practice benchmark by providing a higher level of consumer protection than […] It will be for each firm to decide how the combination of individual circumstances should be treated, recognising that in some instances either the provider or the adviser would simply not be aware due to differing touch points pre and post-sale. In relation to 8.3 (b) (iii) above, the Solicitor who meets the customer(s) face-to-face would not normally expect any other person to be present. requires help to hear, read or understand important information; does not speak English as a first language; has had a significant change in circumstances, e.g. The Chair of the Standards Board is tasked with ensuring that the Equity Release Council is constantly driving up standards within the sector and sharing best practice and innovation so that people who use products and services from Equity Release Council members can feel confident in their choice. It is also recognised that not all factors included in this list indicate a risk and that the list is non-exhaustive. Giving advice on a home reversion plan or lifetime mortgage is a regulated activity under the Financial Services and Markets Act 2000 and anyone carrying out such an activity must be appropriately authorised by the Regulator. 6.1 Members must act responsibly in recommending and releasing drawdown monies to customers by ensuring that customers: 6.3 Guidance for all members – Members should: Encourage customers to have a Power of Attorney (POA) in place where there is no current provision and to consider third-party access options in the absence of a POA and have clear policies and procedures in place that allows for additional flexibility while also safeguarding customers. And to add another layer of accountability, all our advisers at Bower are specialists in retirement lending. As such, the Advising Solicitor must outline the requirements in 8.3 i – v above to the Agent Solicitor and request confirmation that each element has been satisfied. A copy of the Certificate appears as Appendix B. The Equity Release Council (ERC) is an expansion of what was previously SHIP (Safe Home Income Plans) and represents those who work in the equity release sector. Vulnerability is not static and can evolve or change over time. Canada Life’s Setting the Standard Workshops have been designed with advisers who are recently qualified in equity release, or haven’t written new business recently, in mind. Seek to ensure customers are treated fairly and with empathy and sensitivity to their circumstances, Ensure customers are fully aware of any ongoing potential for liabilities under the taxation and welfare benefits systems in using the facility, Consider what and when the ‘triggers’ on drawdown requests would deem it necessary for a direct conversation with customers to be required, Consider when the ‘triggers’ would give rise to advice to be needed at the point of drawdown and recommend that the customer seeks further advice in such instances, Consider advising scripts for staff to help identify the potential risks with drawdown activity e.g. 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. These may have been reported at point of sale or identified with ongoing contact. This detriment could include both financial and non-financial detriment which typically covers distress, inconvenience, pain, suffering or damage to reputation. It sets the standards and principles for members of the Equity Release Council that are set out within this document. I can’t release equity if I have an outstanding mortgage – Yes, you can, but you will need to pay off your existing mortgage balance at the same time. A change in loan-to-value ratios offered for each age, A change in the maximum loan amount offered, A change in the range(s) of ages to which a particular product is made available. This rule also applies where the application relates to an existing customer, who seeks an increase in the amount to be borrowed under a lifetime mortgage contract over and above the maximum amount or loan commitment on which advice was originally given, or an increase in the share of ownership to be sold under a home reversion plan. Equity Release Council. Look at practical ways to validate that the drawdown is for a legal and legitimate purpose. These alternatives should include whether the equity release product is the right product, or whether other alternative types of borrowing are more appropriate, (d) The customer’s(s’) physical and mental health has been considered in relation to the suitability of the plan. Our members are only allowed to tell you that a product meets these product standards if it meets all of them. The following set of factors which should be considered at the initial point of sale, and thereafter, may ‘trigger’ the need for additional conversations or further referral as outlined in the guidance above which will vary on a case by case basis as circumstances dictate. all the costs that you will have to bear in setting up the plan; what will happen if you wish to move to another property; and. There may be circumstances where it is reasonable for a person who is not a beneficiary of the proposed equity release to be present in order to assist a customer. All methods and systems are assessed for their vulnerability to fraud or error. Our standards encompass our proposition, our overarching principles, our required customer outcomes and our rules and guidance for members. The person bringing the complaint should demonstrate that the member has broken the ERC (or its predecessor organisation, SHIP) rules and guidance in place at the time of the alleged breach occurring. 2.1 Provider members may only accept applications for Equity Release Products from firms, or their appointed representatives, which: have recommended the product being applied for. The Sales Process and Customers with Existing Plans, Certificate of Compliance with the Product Standards, Identified through conversation at point of sale and further drawdown which may potentially be unaligned to the customers original plans, b) The period which has elapsed since the original advice, Identified through contact and the use of MI. The Standards Board’s priority is to maintain, develop, promote and adapt the Rules & Guidance & Statement of Principles which all Council members agree to adhere to. The Checklist is designed to help ensure that no significant points are omitted when advising customers on equity release products, or when preparing the information to be provided to them in the Suitability Report. However, where it is identified that there is a vulnerability or other issue, it may be necessary to refer to relevant sources of support. In particular, the customer should receive independent advice in the absence of any intended or potential beneficiary, to avoid any duress being exerted by such a person on the customer(s). There are many high-level circumstances and events that could lead to a customer being vulnerable. You can ask your adviser for a personalised illustration or further information on costs and charges associated with Equity Release plans, Please note that these are typical fees for guidance purposes, and they will vary depending on the Provider, Advisory Firm, Legal Firm and type of Equity Release plan recommended, File size: 889 KB | Type: pdf | Resources, File size: 638 KB | Type: pdf | Resources, File size: 677 KB | Type: pdf | Resources, File size: 827 KB | Type: pdf | Resources, Equity Release Council There are also a number of important qualifying criteria and relevant time limits to consider when making a complaint, and these are summarised within The Councils Complaints and Disciplinary Process which can be accessed at: https://www.equityreleasecouncil.com/documents/complaints-and-disciplinary-process/. The outcome of this contact (whether advice was provided or not) should be shared with the provider subject to customer consent, Ensure that all customers entering into a drawdown plan understand the need to manage their cash reserve responsibly. Rules 6.1 and 6.2 follow. It also drew on external input from the Financial Conduct Authority, HM Treasury and the Money and Pensions Service (MaPS). 8.1 Meeting the customer – requirement for a face-to-face meeting before completion of the initial contract. Provider members will also, as a matter of good practice, carry out regular checks as part of their due diligence. The Council also considers it very important that the customer should signal receipt and acceptance of the Suitability Report. (j) Members might consider developing a process that: (k) Implement robust quality assurance programmes that aim to improve customer experience and outcomes, and routinely test these to ensure that customers are treated fairly, and with empathy and sensitivity to their circumstances. Version 9.0 dated 23rd September 2019 was updated to version 9.0 dated 20th December 2019, following simplification changes within appendix B. For example, Providers could consider conducting case reviews on drawdown requests to assess whether the outcome achieved was appropriate; Consider the collation of appropriate management information (MI) to monitor any adviser, customer and third-party behaviour which may give rise to concerns, in order that emerging risks, issues and trends can be identified and acted upon. Members display the Equity Release Council’s logo on their literature as a guarantee to their customers that they … In all cases where further independent legal advice is deemed necessary a new. Standards Set by the Equity Release Council omega 15th April 2019 Business, Equity Release No Comments When taking out an Equity Release Plan its important to know what standards The Equity Release standards have put in place. MCOB 8 : Equity release: Section 8.3 : Application of rules in MCOB 4 advising and selling standard 8 8.3.2B R 8.3.2C G 8.3.3 R 8.3.4 R MCOB 8/6 www.handbook.fca.org.uk Release 2 Dec 2020 For the purposes of MCOB 4.4A.2R (1)there is one relevant market forequity release transactions. Equity Release Council – Our Rules and Guidance – Introduction. Any choice made by the customer(s) in choosing a particular law firm must be fully documented by the adviser member. The following is a set of Rules & Standards which apply to all Equity Release Council Members. The product must have a “no negative equity guarantee”. Equity Release Mortgage Calculator . The Solicitor who gives the customer independent legal advice about the contract should therefore be able to make this judgment, but if the Solicitor does not know the customer well, or has any doubts about the customer’s mental capacity, a medical certificate will usually be sought. If an equity release product is offered that does not meet all of the product standards the product provider must state prominently in adviser-and consumer-facing literature that the product does not meet all of the standards. f) Known or perceived vulnerability, capacity or coercion issues: These issues should be backed by a comprehensive set of policies that address aspects including where a customer: low literacy, numerical and language skills, redundancy, relationship breakdown or bereavement, medical condition or illness including addiction, financial difficulties including financial abuse, coercion from a third-party or a power of attorney acting for the customer who has not received independent financial advice, enables a customer’s specific needs to be shared seamlessly between the Provider and Adviser member in an appropriate way, actively monitor drawdown requests by having processes in place to ensure the product is being used for the purpose it was intended, and for Provider members to share concerns with Adviser members, Existing plan-holders are reviewed regularly to confirm the ongoing suitability of their plan, Regular reviews should take place at least every 5 years or when a product trigger point or life event occurs (such as death of a customer, or request for a further advance). 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