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AMI response to the FCA later life mortgage market review

AMI response to the FCA later life mortgage market review

The Financial Conduct Authority recently published findings from its review into later life advertising and advice.  It is a must read for all firms operating within the later life market – it is relatively short and can be accessed here. The accompanying press release also provides useful context. The FCA has stepped away from its usual communications process here to give early warning to the market of their ongoing concerns.

The FCA found that major parts of the market have continued to fall short of regulatory expectations despite repeated warnings from the regulator. Of particular concern were findings of “inaccurate or misleading promotions” and firms “incentivising sales” over “quality advice”.

The FCA explained that it had chosen to focus its attention on addressing poor quality advice in the equity release market because it is an area “where complex products are sold to customers, particularly customers with a higher risk of being in vulnerable circumstances.”

AMI response

AMI Chief Executive Robert Sinclair shared his initial views on the FCA findings in his latest introduction to Connect, our monthly member newsletter. However in this article by Tony Crane – Where next for equity release? – Robert expands further on what he believes this means for the future of the sector:

“For some years AMI has been challenging the market to consider whether it has the balance right.

The downplaying of the risks, the heavy promotional spend to drive consumer engagement and customer journeys that almost always end up with a lifetime mortgage now need be addressed properly.

I fear that the Equity Release Council is in the last chance saloon on getting real traction with their membership. Their work sets out clearly what should be done, but it appears too many find adhering to their standards difficult. This sector has additional qualifications and FCA rules on top of the standard residential market. A step change in the quality of advice and better monitoring by lenders is now essential.

Consumer Duty sets new challenges and all firms involved in this market need to think through the simple messages delivered by the FCA. This article by Tony Crane asks some difficult questions, that need to be addressed with integrity.”

Click here to read the Mortgage Solutions article in full including comments from other leading figures in the mortgage industry.

We would encourage all firms giving later life mortgage advice – particularly in respect of Equity Release mortgages – to take heed of these warnings, and take proactive steps to make amends if, within their own firms, they identify any of the shortcomings flagged by the FCA in its review.

If you have any queries, please contact info@a-m-i.org.uk.

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