ERC issues guidance on post-completion communication

The 17-page post completion communications guide has been developed by a Council working group comprising providers, funders, advisers and other industry professionals.

Aimed at advisers and providers, it supports firms’ requirements under the consumer understanding and support outcomes of the Financial Conduct Authority's Consumer Duty.

The guidance describes the various triggers for providers to communicate directly with customers. It outlines regulatory requirements before recommending additional steps to further enhance understanding and support good consumer outcomes.

Examples of recommended communications include:

- A product overview to be sent to the surviving applicant after the other passes away to remind them about the features of the product. This is especially helpful if the surviving applicant was reliant on their partner for help with financial matters.

- A leaflet for family members that explains what equity release is and why a loved one might have taken it out which could be issued when the plan ends. This can help if customers did not follow the Council’s guidance to consult with their families before taking out equity release, which is not always possible.

Kelly Melville-Kelly, head of risk, policy and compliance at the Equity Release Council, said:

“Equity release has traditionally been a long-term commitment, and while that remains true, the freedom and flexibilities of today’s products create more options for customers to consider over time.

“We have worked hard with members to look at how high standards of service can be continued long after the funds have first been released, considering changing circumstances such as the death of a spouse, enquiries about further advances or adding a new power of attorney.

“Equity release receives relatively few complaints¹ and only a handful are upheld. However, a significant portion of those complaints are from family members, which is why we’ve included recommendations on how to support them too.

“It’s important that communications evolve along with the products to help older people and their families make the most of the products to live independent lives for longer and pass on living inheritances.”

“Equity release is a lifetime product, and we believe everyone involved in the industry needs to serve customers for the life of their loan, not just at the point of sale.  As we move ever closer to the introduction of the Consumer Duty, lenders and advisers must act to deliver good outcomes for customers, as such,  it seems obvious these conversations will be increasingly important.

Craig Brown, CEO, Legal & General Home Finance, said:

“Legal & General has been innovating in the equity release market since its entry in 2015. We were at the forefront of offering drawdown, so customers only borrow what they need, when they need it. We also launched our Optional Payment Lifetime Mortgage, to help those customers who want to service the interest on their loans through a regular monthly direct debit, which they can then stop at any time. We always encourage our customers to discuss their plans with family members and are happy for them to support their conversations with our literature, should they chose to.”