equity release council standards
According to the Council, the update in industry standards introduces an approach based on principles and consumer outcomes, … 8.1 Meeting the customer – requirement for a face-to-face meeting before completion of the initial contract. Our product standards are set out below. The Equity Release Council has announced a range of initiatives at its Annual General Meeting to help firms deliver a high standard of support for home owners looking at equity release and later life financial planning. This evidence is provided in the form of the Solicitor’s Certificate which must be signed, both by the Advising Solicitor and by the customer (see Rule 8.5 below). The Equity Release Council has launched its updated industry standards following a wide consultation among its membership, including providers, advisors, solicitors and surveyors. In addition to the MCOB requirements set down the by the FCA there are also industry standards. There are two types of equity release; Lifetime Mortgages and Home Reversion plans. It is recognised that there may, from time to time, be exceptional circumstances concerning a particular product or practice which is not in line with the rules, but which may be beneficial to customers or a particular group of customers. In all cases where further independent legal advice is deemed necessary a new. In assessing whether a variation to an existing product is “material” providers should consider: Whether the features or options available to the customer under an existing product have changed. These Rules are therefore intended to ensure that there is always clear evidence that full legal advice has been given, and at least one face-to-face meeting takes place between the customer and a Solicitor, whether that is a Solicitor from the firm which is advising the customer (“the Advising Solicitor”) or another Solicitor acting under written instructions from the advising firm as its agent (“the Agent Solicitor”). rapid use of the drawdown facility; large amounts being drawdown; drawdowns requested with a considerable time elapsed since initial advance), Customers who have little or no drawdown funds remaining, Number of customers being referred for support, mental capacity, coercion, advice, legal advice and the outcome. If provider members have reasonable concerns about any particular drawdown request based on the individual circumstances or pattern of transactions, they should consider checking with the original adviser firm. The ERC can only investigate complaints against firms who were members of the ERC (or its predecessor SHIP) at the time the alleged breach took place. The Council is aware that the advising solicitor may also be part of the same group as the advising financial adviser, under common ownership. Church Lane Thornby 8.4 Where the Solicitor who meets the customer is acting as the Agent of the Advising Solicitor, he or she must act in accordance with the written instructions issued by the Advising Solicitor and highlight any concerns to the Advising Solicitor following the meeting with the customer. 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. 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. The Board has three independent members and representation from each of the provider, adviser, solicitor and surveyor membership. Such a member shall remain liable to the Council for the amount due unless the Board directs otherwise and in association with Article 34 of the Articles of Association. 11.2 The subscription and fees levels will be set by the Main Board at two-year intervals, but the Board reserves the right to review and amend rates of subscription at a shorter interval if deemed appropriate, 11.3 The subscription year for each Member will run for no less than a period of 12 months from the first day of the month following the date on which the Member’s first subscription is credited to the bank account of the Council or from such other date as the Board or Executive may determine in respect of any particular Member or group of Members (i.e. 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/. These Rules & Guidance were originally adopted by The Council on 11th July 2013 and came into effect on 1st January 2014. The Equity Release Council has updated a key safeguard that highlights some of the most important factors to consider during the advice process and ensures its rigorous standards are met. Vulnerability is not static and can evolve or change over time. Find out how much equity you could release with our FREE Calculator below. The Advising Solicitor will report to the customer, setting out the legal risks and rewards of proceeding, based on the offer which has been issued by the provider. Examples include, but are not limited to; The following variations are not considered material and do not require a new Certificate of Compliance: Customers will be provided with an annual account statement (Requirement of MCOB 9.8.1). any new features or benefits that might be more suitable, or any existing features or benefits that might no longer be suitable, any early repayment penalties for replacing the existing plan, any re-finance of an equity release plan should take account of the fees and charges involved. The Equity Release Council has launched a Best Practice Guide to complement its Checklist for Advisers and support adviser firms when discussing and documenting customer needs. Adviser members must ensure that the customer is provided with a copy of the Suitability Report referred to in Point 24 of the Checklist and obtain confirmation that the customer has received it. 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. Church Lane Thornby The benefits and limitations of the plan will be clearly set out, together with your obligations under the terms of the contract. The rate of interest will be clearly explained in the personalised illustration supplied to all customers during the advice process. Where such a referral process exists, it should be supported by a policy that sets out how providers and advisers will be updated on the outcome of advice received, Ensure quality assurance is gained through regular testing of the process for drawdowns with the aim to improve customer experience and outcomes. We consider that the following examples of best practice may help members: A review of continued suitability should consider: This advice should be documented in a written format to the customer, as per all the Rules and Guidance for new customers, but with specific emphasis on why replacing the existing plan was deemed appropriate. 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. Adding, offering or changing a cashback option, a free valuation, or a drawdown facility, Whether the name(s) or description(s) of an existing product have changed. All methods and systems are assessed for their vulnerability to fraud or error. As stated at the start of this section, the requirement for customers to receive independent legal advice applies before completion of the initial transaction takes place. In any circumstances where a third party is present, the Solicitor should satisfy him- or herself that this is at the request of the customer, that the request is reasonable, and that the third party’s presence and purpose in being present is clearly documented. 5.1 Whenever a provider member introduces a new product, or materially varies an existing product, a Certificate of Compliance with the Product Standards must be completed and submitted to The Council. Supporting vulnerability. Section 6.6 sets out the members guidance for management information. (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. It is up to firms to decide the most appropriate format in which to provide/offer this. The independent legal advice provided should include (but is not limited to) the risks and rewards associated with the equity release product recommended by the Adviser and also the customer’s ongoing obligations under the contract. 8.3 The Solicitor (whether this is the Advising Solicitor or the Agent Solicitor) who meets the customer face-to-face is required: (a) to witness the customer’s (or Attorney’s) signature on any documents which are required to be executed as deeds, (b) to verify (insofar as they are reasonably able to, acting with all due diligence). We live by the high standards that the Equity Release Council sets for products and services. It sets the standards and principles for members of the Equity Release Council that are set out within this document. ©2020 Equity Release Council. “Detriment” might arise if the product were structured in such a way that additional costs could arise during the life of the loan. Equity release is a means of retaining use of a house or other object which has capital value, while also obtaining a lump sum or a steady stream of income, using the value of the house.. If the new property is of insufficient value to secure the amount owed to the provider, any partial repayment will be limited so that the net amount remaining due shall not be less than the percentage of the property value that the provider would advance to a new customer in comparable circumstances. 8.5 A Solicitor’s Certificate, signed by both the Advising Solicitor and the customer, must always be in place before an equity release contract can be completed, thereby providing confirmation that the advice referred to above has been given. Solicitor’s Certificate should be completed prior to the further release or further advance proceeding. 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. The Setting the Standard Workshops look at best practice in the industry, and what advisers should be considering when they speak to their customers, to ensure good customer outcomes. So, any debt you accrue through equity release can’t be passed on to your loved ones after you’ve gone, even if your house falls in value. contact all customers who are referred to them for advice by provider members with the aim of qualifying the need for advice. The following is a set of Rules & Standards which apply to all Equity Release Council Members. It could also arise if any element of the product were so complex as to be difficult for a customer to understand. Members of the Equity Release Council have to abide by a Code of Conduct that guarantees that our ethics and standards. If someone has a complaint about one of our members, they must firstly complain to the member concerned, using that member’s published complaints procedure. The Council’s standards set a best practice benchmark by providing a higher level of consumer protection than any other form of property-based loan. The reason alone might not be an indicator but sometimes when twinned with other factors it will identify potential vulnerabilities. These are explained in more detail within section 12; (b) For lifetime mortgages customers must be allowed to transfer the lifetime mortgage contract to a suitable alternative property, with no increase in the rate of interest. However, where it is identified that there is a vulnerability or other issue, it may be necessary to refer to relevant sources of support. (l) Contact all customers who are referred to them for advice by Provider members with the aim of qualifying the need for advice. 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. Web Site Search The Equity Release Council has updated its industry standards in a move which it claims will provide a higher level of consumer protection than any other form of property-based loan. Others may choose to send a written follow-up letter to confirm information which may have been given over the telephone or on-line. any other issues of which the provider and/or firm providing the independent legal advice is aware which could affect the customer’s circumstances or capacity which may not be addressed sufficiently by the financial advice which will be given in connection with the further advance. 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. The review should consider any change of circumstances, vulnerability or needs since the original plan was arranged. Would help narrow the field of understanding purpose and ongoing understanding training staff. These may have been reported at point of a customer reasonable costs and expenses for entering into the new.. 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