View more on these topics

Equity-release risk is too high for Nationwide

Equity release still threatens to become a misselling scandal, according to Nationwide chief executive Philip Williamson, who is ruling out a launch of a release product by the society in the short term.

In an interview with Money Marketing, Williamson said the society has no plans to enter this sector until it can be proved to be low-risk to clients.

New players have been coming into the field, most recently Bristol & West.

Nationwide will continue to offer transparent and competitive products in the meantime, said Williamson. Its subsidiary UCB Homeloans will be looking at slight-adverse but not sub-prime mortgages.

With almost 200m worth of mortgages turned down by Nationwide every month because they do not meet the society’s criteria, Williamson believes UCB could use this opportunity to move into slight-adverse lending. A product should be available shortly.

Williamson’s concerns on equity release stem from his belief that some advisers are using equity from homes to put into other areas of investment for clients and that this may contravene fundamental guidance on the sales process.

He points out that none of the top-five lenders in the country has equity-release products at present and those that have been in this arena, such as Cheltenham & Gloucester and West Bromwich, no longer seem to be showing an interest in home-income plans.

Williamson said: “I still have major reservations on equity release. The regulator has really got to get its head round the sales process. The sales process must be solid.”


Britannia locks in growth

Britannia Internationals guaranteed lock-in bond is a guaranteed equity bond which locks in a minimum level of growth, depending on the performance of the FTSE 100 index.

Aifa’s view – David Severn

Looking back at the 1999 report establishing Aifa, it is interesting to note the enthusiasm and optimism about the extent to which technological developments were thought likely to revolutionise the way that people do business.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm