Equity Release Council

We talk a lot about the equity release council throughout Sunny Avenue. They play a big role in how advice and equity release is offered throughout the UK. It impacts you as the client. They help to maintain the standards of equity release but they put in place certain rules you must follow.

Membership is voluntary, which is precisely why it matters. The FCA regulates the sale of equity release; the Council sets standards for the product itself, and a lender outside it is not bound by them.

Four protections come with a Council member's plan:

the no negative equity guarantee: your estate can never owe more than the house sells for
the right to remain in your home for life, or until you move into long-term care
the right to move the plan to another suitable property
a requirement that you take independent legal advice, face to face, before signing

That last one is not a formality. It exists because these decisions are hard to reverse.

At a glance

What it is: Industry standards body for equity release
Formerly known as: SHIP (renamed in 2012)
Key guarantee: No Negative Equity guarantee
Cooling-off period: At least 14 days

Key Takeaways:

The Equity Release Council represents companies offering equity release products in the UK. They set rules that all members must follow to protect consumers, such as making sure customers get independent legal advice and promising not to charge more than the value of the home.
The Council is made up of three types of members: provider members, adviser members, and associate members. To become a member, a company has to meet minimum standards and agree to follow the Council's rules.
The Council has set out several key rules, including the No Negative Equity Guarantee, Independent Legal Advice, Clear and Transparent Information, Cooling-Off Period, Suitability and Affordability Checks, and Professional Standards. These rules help to make sure that equity release products are sold responsibly and that clients are protected.
While some people may find these rules inconvenient, they help to ensure that customers get a complete service and understand the terms and conditions of the product before making a decision. Ultimately, the Council's job is to protect the client.

Who are the Equity Release Council?

The Equity Release Council are a group in the UK that represent companies offering equity release products. These products allow homeowners to access some of the value in their homes, either through a lifetime mortgage or a home reversion plan.

The Council used to be called Safe Home Income Plans (SHIP), but they changed their name in 2012.

The Equity Release Council sets rules that all its members must follow to protect consumers. These rules include things like making sure customers get independent legal advice, promising not to charge more than the value of the home, and making sure customers understand the risks and benefits of equity release.

The Council also wants to make sure people know about equity release and how it works. They work to promote best practices in the industry so that people can make informed decisions about whether equity release is right for them.

Who are the Equity Release council members?

The Equity release council is made up by its members. To join the Council and become a member, a company has to meet minimum standards and agree to follow the Council's rules. There are three types of memberships:

Provider members

These are companies that offer equity release products directly to consumers.

Adviser members

These are individuals or firms that give advice on equity release products, but do not provide them directly.

Associate members

These are companies that provide services to the equity release industry, such as legal or financial services.

Without its members, the council wouldn't exist. The Council is made up of companies that provide equity release products. These companies are the reason the council exists.

The council has earned a reputation for being trustworthy because they've set the best practices in the industry. This means that if you want to become a member, you have to follow these practices. Some of them require extra work, but they're important for protecting customers.

Most equity release companies want to become members of the council because it shows their clients that they put them first. If a company decides not to join, it could look like they don't follow the best practices.

Equity Release Council Rules?

Here are some of the key rules that the Equity Release Council has set out:

No Negative Equity Guarantee

Members of the Equity Release Council have to promise that the amount owed by the customer will never exceed the value of their property. This means that if the property value drops, the client or their family won't be left with a debt.

This is known as a No Negative Equity Guarantee.

Independent Legal Advice

Members have to make sure that the client gets independent legal advice before taking out an equity release product. This helps to make sure that customers fully understand the terms and conditions of the product before making a decision.

Clear and Transparent Information

Members have to provide clients with clear and transparent information about the costs, benefits, and risks associated with equity release products. This helps customers to make informed decisions about whether equity release is right for them.

Cooling-Off Period

Members have to provide a cooling-off period of at least 14 days, during which the client can change their mind about the equity release product without penalty. This gives clients time to consider their decision and make sure they're happy with it.

Suitability and Affordability Checks

Members have to conduct thorough suitability and affordability checks to make sure that the equity release product is suitable for the client's needs and financial circumstances. This helps to make sure that clients aren't taking out a product that's not right for them.

Professional Standards

Members have to maintain high professional standards and follow the rules and regulations set out by the Financial Conduct Authority (FCA). This helps to make sure that clients are dealing with companies that are reputable and trustworthy.

By following these rules, the Equity Release Council's members help to protect clients and make sure that equity release products are sold responsibly. This means that they can feel more confident about using equity release to access the value in their homes.

What are the downsides of the Equity release council?

While some people may find these rules inconvenient, they help make sure customers get a complete service. For instance, giving customers independent legal advice and clear information takes time, but it means clients understand the terms and conditions before making a decision.

The cooling-off period also gives customers time to think and be sure they're happy with their decision, even though it might slow the process down. This guarantees that customers are happy and satisfied with their choice.

Ultimately, the council's job is to protect you, as the client. I personally believe that the equity release council does good for the industry and all of the equity release advisers onboarded are members of the council.

If you are looking for more information on the Equity release council, visit their website.

Seeking an Equity Release Council adviser

What does the equity release council do?

The Equity Release Council exists to promote high standards of practice and conduct in the Equity Release industry.

Members agree to these standards that ensure fair treatment of clients.

How do you find Equity Release Council members?

You can find an Equity Release Council member through Sunny Avenue, or the Equity Release Council website.

How does the Equity Release Council help clients?

The Equity Release Council sets rules on certain features that must be included within Equity Release products. These rules add flexibility to improve the suitability of equity release for clients.