Industry experts have reinforced this message following a survey by Moneyfacts which discovered 81% of people aged over 55 thought they could take out an equity release plan without help from a financial adviser.
However, the Equity Release Council, the trade body for the industry, said it was a requirement for people to have sought advice in a process which also looked at the all the alternative options available.
A spokesperson for the Council said regulated advice was one of three fundamental protections in place when people explored taking out an equity release product from its members.
This was alongside face-to-face independent legal advice and robust product safeguards. It said these commitments had been vital to establishing consumer confidence in the market.
Discussing other options
Indeed, members of the council committed, alongside their regulatory obligations, to taking customers through a detailed step-by-step process which included discussing future plans and aspirations as well as potential alternatives such as downsizing – both now and in the future.
Customers were also advised to discuss their choices with the family or other beneficiaries of their will before committing to a decision.
The spokesperson added: “Every individual has different circumstances, which is why equity release and housing wealth have a rightful place among a range of options and assets that should be considered as part of a joined-up approach to retirement planning.”
Meanwhile Will Hale, CEO of equity release adviser Key, said while it was concerning 81% of people would go it alone, it was not a surprise as Key occasionally heard as much from customers.
He added: “As we move through the process they are generally relieved to have specialist advice and support from experienced advisers who do this on a regular basis.”
Not just a transaction
Key said taking out any kind of later life mortgage was far more complex than people realised as it was not simply a transaction. There were also other issues to consider such as inheritance, benefit eligibility, future goals and long-term affordability which meant it required a ‘specialists’ touch’.
Hale added: “It is always valuable to understand people’s views on equity release and this research clearly illustrates that the industry needs to work to hammer home the point that good advice is key and this should be the starting point when people are considering later life borrowing.”
