Has the myth of 'wild west' equity release products been dispelled?

Given the overwhelming exposure which equity release has received over the past couple of years moreover, the growing existence of headlines seeming to emphasise (or, at least, question) the possible ‘safety’ of equity release raises a number of pertinent questions for our industry: are they a reflection of the genuine hazards posed by these products, the result of previous mis-selling techniques (used primarily in the 1980s) or (most likely) an attempt to generate stories based on a subject which is continuing to gain traction amongst a particular group of readers and is therefore ‘fair game’?

Well, let’s start off by reminding ourselves that all financial products carry more than an element of risk if they are entered into without due consideration or prior research and to emphasise the steps taken by the Equity Release Council to pre-empt these concerns by insisting that all customers take professional financial advice and independent legal guidance before they are allowed to proceed.

Let us also consider the fully regulated safety provisions that are offered ‘as standard’ to customers (such as ‘no negative equity guarantees’ and ‘security of tenure’ clauses) as well as the strict codes of conduct which ERC members are expected to adhere to as a means of dispelling the notion (or illusion) of unstable or fundamentally flawed ‘wild west’ products being sold with reckless PPI-like levels of abandon.

Secondly, and on the basis that most financial consumers are nowhere near as gullible as some newspapers would have us believe, let’s reiterate the fact that levels of released equity have more than doubled over the last two years and are continuing to grow substantially: up 37% in like-for-like value and 29% in custom over the first two quarters of 2018-. Figures that genuinely seem to speak for themselves.

And lastly, let us triumph the unquestionable benefits that customers can gain from using equity release products; from ease of access and the lack of impact on monthly outgoings to optional ‘inheritance protection guarantees’ and the ability to ‘gift’ set sums to children or other dependents at any time.

In short, we need to remember that, irrespective of the ‘slant’ or agenda of newspaper (or other platform) stories that appear, equity release is a strong, viable and (above all) safe choice for our customers and that any questions that are raised as a result of this free publicity can always be answered in full. That, in many ways, articles such as these present us with an infallible win-win scenario! So, bring it on.