The FCA found 3 significant areas of concern relating to the suitability of advice that firms provided, which could increase the risk of harm to consumers in the equity release market:
- Insufficient personalisation of advice;
- Insufficient challenging of customer assumptions; and
- Lack of evidence to support the suitability of advice.
Firms must therefore ensure that:
- they take reasonable steps to obtain sufficient information from customers to provide advice;
- the advice given is suitable when giving advice to enter into an equity release transaction (for the new transactions as well as amendments to existing equity release products); and
- they collect and retain the necessary evidence to support that assessment of the suitability of advice and how it was determined.