What to expect when you receive equity release advice

Equity release providers who give advice and sell equity release must be regulated by the Financial Conduct Authority (FCA) or be an agent of a firm that is regulated. You can check the FCA register to see if the firm is listed. The individuals of these firms who give the advice must be qualified to do so. 

We have set out the three stages of receiving advice about equity release. This includes what to look out to make sure the advice process is being managed professionally.

Your equity release adviser should make you aware of certain things during your initial meeting. They can do this verbally in your initial consultation or in a written document.

Your equity release provider and adviser must tell you that they are giving you advice and if this comes with any cost.

Your equity release provider or adviser must set out what services they will deliver; are they offering lifetime mortgages or home reversion plans or both? Can they access the whole equity release market or just a few selected providers?

Once your adviser has completed their fact find, they may decide to make a recommendation to you. They will give you a mortgage illustration document, also sometimes referred to as key Facts Illustration (KFI). These documents include:

• Which service you are taking i.e. a lifetime mortgage or home reversion plan
• Any additional features of this product such as ring fencing, no negative equity guarantee
• The overall cost of the scheme including any fees to pay
• The provider of the equity release
• For lifetime mortgages the interest rate
• The implications of repaying the lifetime mortgage or buying back under a home reversion plan
• How much money you want to release and the type of scheme you are interested in
• If you have a lifetime mortgage with repayments, how much these are and the increase in these if rates go up or down
• The terms of the recommended scheme
• The impact taking equity release will have on your estate and what your beneficiaries will inherit after your death
• Guidance about your options to move home or what happens if you go into permanent care
• The impact on any means tested benefits you may be entitled to.

This documentation will also include a suitability report.

You will receive an offer document once your application for equity release has been approved. Your offer will include:

• Your name and address
• The fees you will pay
• The amount of equity release you will receive
• Any specific requirements of your equity release offer