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Equity Release clients need “tough love” says Bridgewater

Bridgewater is urging equity release advisers to show ‘tough love’ when dealing with their clients.

The home reversion provider says advisers must challenge customers with regard to their preferences, particularly around any misconceptions they may have about which equity release product they think they need.

It also has concerns that non-specialist advisers are moving too quickly to accept a client’s initial product preference instead of gathering the relevant information to make their recommendation. The lender says that some firms may not have sufficiently robust equity release advice and sales processes, and could therefore be offering unsuitable advice.

The warning comes as the FSA stated last month that the regulator is keeping a close eye on equity release advisers, particularly those who have recently diversified into the sector.

Bridgewater head of sales and distribution Peter Welch says: “As a sector still defined as ‘high risk’, the likelihood is that the FSA will always take a keen interest in those who are advising in this area, particularly at a time when many firms are making their first forays into equity release.

“Customers who come to an equity release adviser will often have their own preconceived notion of which product is right for them, regardless of their risk profile, their current needs and circumstances and the result they want to achieve. The very best equity release advisers will show ‘tough love’ and are not uncomfortable questioning customers about difficult subjects while challenging their views in order to make sure the advice received is ultimately aligned to the customer’s needs.

“Customers are much more likely to respect an adviser’s bold recommendation when it is clearly the one best suited to managing their risks and giving the highest probability of meeting their needs and aspirations, even if it may not be the advice the customer ‘emotionally’ wants to hear.”

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