What you need to know to advise on equity release

25 January, 2021Juno Baker

If you’re CeMAP qualified, then studying to advise in equity release is a great way to develop your skillset and boost your professional credibility. We look at what an equity release adviser does, what’s required by the regulator and what specialist knowledge those advising on equity release need?

Why is demand for equity release rising?

keys in the lock of a front doorDemand for equity release hasn’t quite reached pre-pandemic levels. However, figures from the Equity Release Council show that when the lockdown was eased last year, activity rose by 41%.

Long-term rises in UK house prices mean that increasingly a large percentage of homeowners’ wealth is contained in the value of their property. Equity release enables people to either supplement their income or access a lump sum.

At the same time, these same house price rises – combined with historically lower savings rates and high rents – mean many first-time buyers can't save enough to get on the property ladder.

Add to that the impact of Covid-19 on the economy and increasing unemployment. It’s no wonder that many people are looking for ways to tide them over or to support loved ones.

But equity release isn’t the right answer for everyone, which is why advisers need specialist knowledge and skills to be able to guide their clients.

What does the FCA expect from equity release advisers?

The Financial Conduct Authority (FCA) recognises how equity release can benefit some customers. But it also wants to ensure that “consumers are fully informed and receive suitable advice that has taken account of their individual circumstances”.

This includes making potential risks clear, for example, higher interest rates and any possibility that the debt may increase.

More generally the FCA places a significant focus on vulnerable customer care and this is something you need to be particularly mindful of as a mortgage adviser – including if you're advising on equity release.

Any equity release scheme must be clearly and demonstrably in the best interests of the customer. If it solves a short-term issue, but creates long-term challenges, it’s not the right thing.

So you need to be able to explore all the options with your customers including other courses of action that may be more appropriate. You have to be able to ask the right questions, investigate answers and document responses accurately and in detail.

Talking through the advantages and disadvantages of each equity release scheme will help your customers fully understand the risks.

Finally, your fact-find must be rock solid so that you can make the right recommendation for your client based on their individual needs and circumstances.

All of that requires specialist knowledge!

Why study to advise on equity release?

Given the complexity of equity release, it’s no wonder that – to advise on equity release – mortgage advisers need an additional qualification on top of CeMAP.

Any mortgage adviser who wants to consider and advise on all the options available to their customer, needs to fully understand those options – including the potential risks and benefits.

Our Certificate in Equity Release (CeRER) takes just six months to complete. The course includes study texts, interactive and audio-visual materials and is assessed through a two-hour objective exam. When you’re ready to sit your exam, you can choose from test centres nationwide or take it by remote invigilation.

CeRER is a great way to develop your skillset and increase your professionalism. But most importantly, it will help you give your customers get the best possible advice and service.

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 Certificate in Regulated Equity Release (CeRER)