Consumer misconceptions blight equity release
Research from Bridgewater found that the same issues were being raised by multiple clients. It said the most common consumer fear was over giving away their inheritance, a third of respondents said that clients believed they would lose their home after taking out the plan.
In addition, 25% of advisers said that clients often thought they would end up owning more than their home was worth.
The firm also asked brokers to rate the level of knowledge their clients had about equity release with 58% responding that most clients had heard of the products and had a basic knowledge. However, 18% of brokers said that around said their clients had no knowledge at all of equity release.
Chris Prior, manager of sales and distribution at Bridgewater, said that the sector still faced a battle to create confidence in equity release products.
“It is disappointing that after years of the Equity Release Council’s Code of Conduct, previously the SHIP Code, being in place and the Council pushing its key messages we are still faced with a customer base which believes they will be giving up too much by opting for a plan.
“While it appears that customers are much more likely to come armed with some knowledge about equity release before dealing with an adviser, it is still the case that this type of mis-information is taken as fact, and this is a significant obstacle in the way for advisers to clear.”