Jon King, chairman of Safe Home Income Plans (SHIP), said:
“The most important thing is that consumers will be able to enjoy, on whatever type of plan they take out, the protection of the FSA and the Financial Ombudsmen Service. Not having home reversion under regulation was warping the market. Regulation will help facilitate the growth of home reversions. While people won’t buy the product because it is regulated, it opens up channels so people will consider it.
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If advisers want to be involved in equity release, they need to be suitably qualified. Home reversion is the original equity release and has the longest history. Yet, it was overlooked in the original regulation because it’s a relatively small market.”
Duncan Young, managing director of Retirement Plus, said:
“With regulation, everyone will be providing the same documentation and there will be consistency in what we do. This will help the market as a whole and increase home reversion’s market share, but it won’t come quickly.
Regulation will improve people’s confidence in equity release. However, people are not aware of the regulation and it will take a while for it to filter through.
There will be more focus on the products being offered and brokers will have to pay more attention. Providers will also have to think about what they are doing.”
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Stuart Wilson, managing director of the Equity Release Advisory Service, said:
“Regulation will force brokers to take a serious look at home reversion schemes, as post-regulation they have to decide what products to advise on. Brokers need to understand what reversion is all about and apply it from a best practise point of view. They have an obligation to advise on it, if it is good for the client.
Anything that can remove consumer confusion gives benefits to all. I believe it will incentivise brokers into equity release to a small degree.”
Jayne Almond, chief executive officer at Stonehaven, said:
“In the medium to long term, regulation will be positive for the market and should boost consumer confidence. In the short term, there could be some disruption because advisers will have to get trained and providers have a lot of work to do to ensure their products are compliant.
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From the consumer side, they don’t really understand the impact of regulation. Scare stories like the Trevor McDonald programme don’t help and consumers’ perception will take a while to adjust. We need to work collectively to get the message across that there is a huge need that equity release addresses.”
Dean Mirfin, business development director at Key Retirement Solutions, said:
“The most positive impact may or may not come in the form of more sales. With the whole of the sector regulated, that will send a positive message to consumers. The rules mean it will be easier for consumers to identify an adviser that provides advice on all products.
Regulation gives providers the opportunity to see how home reversions work on a level playing field. It also has to improve standards, but the rules are only as good as the people who apply them.”
