Warning issued over unregulated equity release plan

A warning has been issued by the Society of Equity Release Advisers (SERA) over a new product aimed at homeowners looking to release equity, offered by a company called Equity IQ Ltd.

According to SERA, the Property Income Plan "appears to offer benefits" to the homeowner who may be deterred from taking a traditional form of regulated equity release, but the plan circumvents industry regulations, meaning that the provider is not authorised by the Financial Services Authority (FSA), nor is the product or the sales process.

Simon Chalk, equity release planner at LaterLiving, said that although the product may be "perfectly legal", it will nonetheless be regarded by consumers as such so must only be considered in the same context as fully regulated products like Home Reversion Plans and Lifetime Mortgages.

"Although the provider seems to be taking some cautious steps in using authorised IFAs and mortgage advisers to sell the plan, I am extremely concerned about the risk posed to homeowners by advisers lacking the requisite skills, knowledge and qualifications of an equity release professional," he explained.

It comes after Jason Zemmel, a business owner, told OnRec.com that businesses of all sizes should aim to become FSA authorised to boost their reputation.

Posted by Tony Miller