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The appliance of alliance

Lee Jones looks at how the alliance has been formed to drive equity release and give confused customers more access to quality advice

Independent Equity Release Advisers Alliance chairman Anthony Harris (pictured) believes advisers are not promoting equity release properly. He says: “The alliance aims to be the adviser voice in the equity release debate which until now has been missing.”

The IERAA was launched in June as a representative for all advisers who specialise in equity release and Harris believes it was long overdue.

He says: “There is so much statistical evidence to suggest that equity release will be a significant retirement solution but so many people do not know where to turn for quality advice, so the alliance has been pulled together to better promote the good advice that is out there and raise the public and the industry’s awareness.”

The IERAA was created by 18 founding members of small IFAs and currently represents 53 advisers. Only small firms with exemplary records of compliance which do certain levels of equity-release business can join. The alliance also demands that members adhere to its client check- list, code of ethics and its customer charter.

Harris says: “We want to raise the bar in the adviser community. We want to be able to offer an option to customers whereby if you turn to an alliance adviser you know they will go the extra mile. We go above far and beyond anything the FSA currently lays down.”

Harris says one of the strengths of the alliance is its community spirit. He says members are encouraged to talk to each other and help with tricky cases: “We have a community of advisers working together.”

The IERAA also promotes the fact that it is made up of small local IFAs rather than Harris: The adviser sector has to tell people that equity release has improved. It should not be a dirty word any morebig national firms, which Harris thinks is crucial to good equity-release advice.

He says: “We are the local man on the doorstep, not some great big multi-national. Locality is absolutely crucial for equity-release advice because face to face is key. Being able to provide advice in a client’s home, in their comfort zone, means they can think freely and better understand what is going on. In an office or over the phone may be alien to the client.”

“We are the local man on the doorstep, not some great big multi-national.”

The equity-release sector has recently suffered casualties. Both Coventry Building Society and Retirement Plus temporarily bowed out of lending this summer while In Retirement Solutions and Newcastle Building Society Equity Release Advisers closed their doors.

But Harris says it is the job of the adviser, not the provider, to make sure that the sector survives and thrives.

He says: “The equity-release adviser sector absolutely has to be more forceful in getting out there and making people under- stand the product. It has to tell people that equity release has improved and does not need to be what it has been in the past. There is so much more to the products now and we need to promote that. It should not be a dirty word any more.”

Harris also believes that it is time for advisers to take a central role in the development of new equity-release products.

He says: “Statistics and demographics stare very pointedly towards the fact that there will be a need for many people to use their property for their retirement in the future. Yet we have not been very innovative in creating products to facilitate that, so hopefully the alliance will also help providers create new products. A body of experienced advisers working up and down the country understands what clients are really looking for. There is scope for more innovations in equity release and who better to help create them than advisers who actively engage with customers every day on the ground?”

Harris also believes equity release advisers should have a more central role in helping shape long-term care reforms.

He says: “The industry has yet to succeed in educating Government in what equity release can do. It was not mentioned enough in recent long-term care proposals because those people who put it together do not know how it works. Hopefully, the alliance can do what the ER industry has yet been unable to do and educate the right people.”

Ultimately, the IERAA thinks that the future of equity release lies alongside other retirement planning products. Harris says: “Equity release would benefit from not being reviewed on its own – it is a distinct part of post-retirement plans for either income or capital so it must be part of all advisers’ retirement plan- ning strategies.”


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