Customers considering an equity release product will be required to have at least one face-to-face meeting with a solicitor before taking out a plan that meets equity release council standards.
Following a temporary adjustment to the Council’s guidelines that have been in force since April 2020, the revision represents a return to pre-pandemic requirements. This ensured that, despite consecutive lockdowns and continuous social distancing tactics, cases could still advance and clients could obtain monies.
Currently, independent legal advice is one of the most important consumer safeguards. Since 1991, when the first industry guidelines were introduced, all new clients have been expected to go through this process. In 2013, the requirement for face-to-face communication was added.
The interim change allowed a new method based on a combination of written guidance and videotaped video or telephone calls since many organisations across all industries were obliged to adapt their working processes during the pandemic.
This increased the total number of interactions between consumers and their legal advisers, allowing for more thorough verification of the client’s identification, mental capacity to enter into a contract and the agreement of all parties involved to proceed without pressure or coercion.
Existing cases that are in progress today and have used this temporary amendment must now be completed by 31 July. All new cases from today must involve an element of in-person, face-to-face legal advice in order to be accepted. Industry data suggests the vast majority of cases in Q1 2022 already involved face-to-face legal advice.
Equity Release Council chair David Burrowes says: “The temporary amendment to our requirement for face-to-face legal advice served its purpose well by protecting customers and maintaining their access to vital funds in trying circumstances.
“The Council’s unique ability to bring together firms from across the market helped to identify a practical solution whereby customers were not cut off from money tied up in their homes, which in some cases was key to accessing care services when they most needed them.
“While restrictions have ebbed and flowed during the pandemic, we are hopeful the worst is now behind us. The time is right to return to the default of in-person legal advice while learning lessons about how technology can best support the overall process and customer experience.”
Equity Release Council CEO and non-executive director Claire Barker says: “Independent legal advice is one of the unique distinguishing factors that sets equity release apart from other retail financial services when it comes to customer safeguards and protections.
“Legal firms were able to preserve this important link in the chain throughout the pandemic, despite the adverse operating conditions. Industry collaboration on risk management and sharing of best practice meant we could uphold standards of consumer protection and demonstrate this to lenders and funding partners.
“While face-to-face legal advice remains the gold standard, many uses of technology during the pandemic can continue to benefit customers in the long run. A good example of this is financial advisers using video conferencing to bring family members into conversations about releasing equity or solicitors using online case trackers to liaise with clients.”
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