Fair Value Assessment
Equity Release Associates Limited’s Equity Release Service
Equity Release Associates Limited (‘Equity Release Associates’) is a manufacturer of the equity release advice service we provide. The following information has been created to detail our approach and adherence to the Financial Conduct Authority’s fair value regulations.
Background:
As an intermediary, and a manufacturer of the advice service that we offer, Equity Release Associates must comply with regulatory obligations that require us to maintain, operate, and review our service on a regular basis, this includes having a robust Product Governance framework in place to understand the financial products that we distribute to our customers, assess the products compatibility with the needs and characteristics of our target market and ensure that we only distribute these products when they are in the best interests of our customers. This process is designed to
ensure that the service offers, and continues to offer, fair value to customers within our target market.
Fair Value Assessment:
Equity Release Associates has well established policies and procedures in place and as part of our fair value assessment, we have considered how our years of expertise have enabled us to mould a successful business allowing us to offer suitable equity release solutions to our customers.
We have considered the following areas as part of our fair value assessment:
- Our target market – The needs, characteristics and objectives of our target market;
- Our service – The benefits and limitations of our service;
- Costs – The types of costs and charges incurred;
- Remuneration – How Equity Release Associates is remunerated;
- Distribution strategy – The services and products that we distribute remain appropriate for our target market;
- Enhanced services – The enhanced services offered through Equity Release Associates;
- Vulnerable customers – The support that we provide to customers with vulnerabilities or those that display characteristics of vulnerability; and
- Regular reviews – Our commitment to regular reviews and adaptations where appropriate.
Our assessment has concluded that our advice service and the products that we distribute offer fair value to our target market which is further
detailed within this document.
Target Market:
Equity Release Associates’ target market is UK residents aged 55 plus. They are at or approaching retirement and seeking advice to meet their financial objectives in their later years. They wish to ensure their quality of life through retirement is either maintained or indeed improved and thus wish to consider a range of options as part of later life planning.
The target audience for our communication consists of three core segments;
- Financially capable older individuals or couples, with high value assets looking to enhance their lifestyle;
- Older individuals or couples owning their houses, planning for retirement; and
- Pensioners in modest accommodation using traditional methods to manage their finances and make life more comfortable.
Equity Release Associates has conducted a thorough assessment of the target market and concluded that our proposition aligns with the distinct needs of our customer demographic. This comprehensive approach ensures that we are well-equipped to provide tailored advice or guidance, supporting our customers in achieving their later life planning objectives and maintaining or improving their quality of life in retirement.
Benefits and Limitations:
Our equity release service is designed to support customers who want to utilise the equity in their property to achieve their financial objectives. By
seeking advice from our team of experts, customers can access a range of equity release options that would not otherwise be available.
We offer access to a variety of solutions that are tailored to each customer’s individual circumstances and our experts carefully assess each
customer’s needs and goals to identify the most suitable solution for them. At the core of our service is the belief that individuals seeking to access the equity in their property deserve expert and unbiased advice on their options.
Our customers also expect a welcoming and efficient experience, something that we take great pride in delivering to our customers. Our service can be split into two categories as detailed below:
New Plan
A Whole of Market service which allows us to explore all available options and recommend a suitable solution based on the customer’s preferences and priorities.
Further Advance
Where the customer is accessing funds from an existing plan via a further advance, in this scenario, a reduced fee is charged in recognition of a lower level of customer support required post application.
What is this service?
Equity Release Associates’ equity release service offers:
Impartial, professional and personal advice from a qualified equity release adviser with the expertise to recommend a suitable
solution based on the personal circumstances and objectives of the customer.
An explanation of products available; displaying comprehensive knowledge of the various features available.
Direct to consumer advice on Equity Release tailored to each customer’s unique circumstances.
Explanations and advice are provided in plain English, providing customers with the information they need, at the right time, and presented in a way they can understand, cutting through the jargon.
Transparent costs and charges.
A commitment to the highest professional standards throughout.
Our end-to-end process is designed to support customers throughout their entire journey.
What customer need does this meet?
Our services allow customers to utilise equity within their UK owned properties for a variety of reasons to maintain or improve their current circumstances or enhance their life.
Equity Release is designed for customers who are looking to use their property assets to:
- Pay off their outstanding mortgages or debts.
- Are looking to make lifestyle and/or home improvements.
- Need funds for their domiciliary care needs.
- Are using the money for gifting.
- Are wanting to make significant purchases such as a new vehicle, holidays or property.
- Support for everyday living costs.
- Customers considering their holistic retirement planning.
Who is this product designed/suitable for? Who is the target market?
Our service is suitable for the following :
- Single or joint applicants aged 55 or over who are UK residents and are classed as; or looking to become ‘Homeowners’.
- Are living in England, Wales, Scotland or Northern Ireland.
- Are of any tax status.
Who is it not suitable for?
Our service is not suitable for customers:
- Who are aged under 55 years old
- Who do not reside in the UK or spend more than 6 months outside of the UK
- ho may want to use their equity for gambling purposes or short term borrowing
- Who are unable to understand the complexities and risks of what they are entering into
- Who do not want to reduce the equity in the property and ultimately the value of their estate
The above list is not exhaustive and will only provide a recommendation where it is established as a suitable solution.
Customers who are in receipt of means tested benefits may see an impact to the benefits received as a result of releasing equity from their property. Our qualified advisers will highlight the risk and recommend that this is explored with the benefits agency before proceeding with Equity Release but will not provide advice in relation to this aspect.
Can this product be bought without advice?
No.
How can this product be bought?
Either face-to-face, via telephone or video call.
Equity Release Associates’ equity release service is designed for customers aged 55 or over, providing fair-value solutions to unlock property equity.
The service, available through face-to-face, telephone, or video consultations, offers personalised advice from qualified advisers. This advice covers
various options, ensuring tailored solutions for diverse customer needs. Transparent communication, plain English explanations, and clear disclosure
of costs and charges underscore the commitment to fairness.
Equity Release Associates ensures fair value by providing recommendations only when deemed suitable, actively informing customers about potential impacts and risks. With a focus on transparency, expertise, and personalised solutions, we are a reliable resource for individuals seeking to leverage
property assets for financial goals.
Costs and Charges:
The total price paid by a customer using our service is made up of immediate costs such as advice fees, valuation fees, legal fees and product fees, and ongoing costs such as the interest charged or the roll up of interest over the life of the mortgage.
The remuneration received by Equity Release Associates contributes to the variable costs of providing the service including marketing costs, salaries of sales and support functions, telephony and postage costs, and the fixed costs of running an office. We have created bespoke dynamic systems to reduce errors and the complexity of advice, and we monitor MI across of all areas of the process to identify trends and allow ongoing reviews of our service to continue to reduce risk and support more customers.
We believe in being open and transparent with our customers from the start of our relationship and detail our fees in our marketing literature and on our website. Our advisers discuss fees in full with their customer during their fact find process, a vital part of this discussion is understanding what fees are payable, how the customer wishes to pay these fees and the impact to their estate and/or assets as a result of paying these fees. A full
breakdown of this conversation is provided to the customer within a recommendation document to retain for their own records.
The equity release solutions that we offer may result in additional costs to our customers depending on the solution recommended and these differ on a case-by-case basis. All fees associated, both immediate and ongoing expenses, with the recommended solution are outlined within our
documentation, prior to the customer’s decision to proceed. Where we are unable to confirm exact amounts such as legal costs, we provide an
estimated cost based on our customer using a panel solicitor and include clear warnings that they are indicative only and costs may vary.
The below table explains the fees and costs that may be applicable during or following the completion of the equity release plan:
Fee
ERA Assessment
Advice Fee
Providing suitable advice across equity release products requires in-depth knowledge and expertise of the industry. Our advice fee
reflects the effort required to providing a market leading service.
Procurement fee
Procurement fees are payable by the lender and are designed to compensate service providers for their expertise and time in
facilitating transactions and customers to achieve their goals. The fee is typically a percentage of the total loan amount.
Legal Fees
Customers accessing equity release solutions through our service will require Independent Legal Advice.
The costs to complete the transaction will be determined by many factors:
- The amount of work required to register the charge.
- The hourly rate of the solicitor, which is often dictated by location.
- Any additional issues that arise during the process, including but not limited to Marital/Separation issues, Occupier waiver
consent and unregistered/non digital registered properties. - There will also be additional costs for disbursements and VAT.
Valuation Fee
All lenders require a property valuation to assess the suitability of the property and eligibility against their lending criteria. The fee is set by the lender and is not influenced by ourselves, however the value of the fee will be considered when researching a suitable
product and we may be able to source a product which contains a free valuation in line with the customer’s preferences and
priorities.
Product Fee
Lenders may require an upfront fee to be paid to access additional benefits or a preferential rate. Other products may allow the
product fee to be included in the total cost of the borrowing or paid separately upon completion. The value of the fee will be considered when researching a suitable solution.
Cash Back
A cash back feature is sometimes available with selected equity release products, this product is designed to provide the customer with additional cash in addition to their loan and/or reduce their initial borrowing amount. This feature may be offered instead of other alternatives such as a valuation or legal assistance and it may incur a higher rate of interest. The overall advantages of products offering cash back will be considered in line with the customer’s preference and priorities when researching a suitable
solution.
Arrangement Fee
This often helps to cover the provider’s costs in setting up the plan. The fee is set by the lender, but our advisers will ensure that the arrangement fee paid reflects the most cost-effective solution to meet the customer’s personal needs and circumstances, clearly sign posting the potential impact to the estate.
Transfer Fee
Some providers may charge a fee for transferring funds. The fee is set by the lender, but our adviser will ensure that the transfer
fee paid reflects the most cost-effective solution to meet the customer’s personal needs and circumstances, clearly sign posting the potential impact to the estate.
Interest rate
The products available to customers through our service offer the customer the ability to repay the interest on the loan or allow the interest to roll up and be repaid from the estate later.
We offer advice on a wide range of products from across the whole of the market with varying costs to the customer and/or their estate.
Some Lifetime Mortgages require no monthly repayment, this results in the interest being added to the loan amount and
compound interest building on the loan each month/year which can be more costly to the customer’s estate.
Early Repayment Charges
An early repayment charge (ERC) may exist where a customer wants to repay their loan prior to the end term of the Equity Release plan. Our advisers factor ERCs into their advice to ensure that the customer receives tailored advice.
Advisers will consider whether a customer will incur a penalty for repaying any outstanding loans or mortgages against their property. They will discuss the customer’s needs, the cost to the estate and the customer’s preferences and priorities whilst also
exploring any alternative solutions.
Equity Release Associates offers a valuable service utilising standardised guidelines to meet our regulatory obligations, quality assurance systems and
controls and adviser training to ensure they are at the forefront of industry and regulatory changes, which support consistently suitable advice while reducing the risk of customer harm.
Our unbiased advice and end to end service includes post-advice customer support and a fee is only payable to us upon completion. We continue to
review and enhance our proposition and our advice fee and procurement fee reflects the effort required to providing our market leading service.
Equity Release Associates will only make a recommendation where we believe equity release is a suitable solution which meets the customer’s needs and requirements. As part of our robust Product Governance framework, we will only distribute a product where we believe it offers fair value to our target market. We have assessed the fees that a customer may incur as part of the equity release journey and we believe that the costs incurred are fair value based on the expertise that we provide for long term borrowing needs, the ongoing support that customers receive and the innovative systems and controls that we have in place to protect customers from foreseeable harm.
Equity Release Associates’ commitment to regular reviews and evidence-based assessments ensures ongoing fair value throughout the distribution chain and the term of the plan.
Remuneration:
Equity Release Associates are remunerated through our advice fee and procurement fee. Advisers recommend the most suitable product for the
customer irrelevant of loan value, lender or procurement fee. We ensure that all of our processes, systems and standards are designed to assist the adviser in recommending the most appropriate product for the customer, and we conduct regular monitoring of advice cycles to ensure that our
standards are being adhered to.
We provide an end to end service, resulting in a post application customer support journey through to completion and Equity Release Associates’
advice fee remains a flat fee regardless of the complexity of the application or of the issues raised during the customer’s journey.
The value of the processes involved in providing our service are regularly reviewed as part of our commitment to deliver an easily accessible, clear to understand, and suitable service of fair value to our target market. Where it is considered that part of the service provided may pose a potential risk of harm to the customer, a full review is conducted with appropriate actions taken to resolve the issue.
We continually assess cost and profitability as market conditions evolve, this includes a review of our charging structure to ensure that we continue to provide fair value for customers in our target market.
Our commitment to maintaining unbiased and high standards is evidenced through regular monitoring, ensuring adherence to established standards
throughout the advice cycles. Our continuous review processes underscore our dedication to delivering a service of fair value to our target market.
Additionally, ongoing assessments of cost and profitability reflect Equity Release Associates’ commitment to adapting and optimising our charging
structure, ensuring the continued provision of fair value in dynamic market conditions.
Distribution Strategy:
Equity Release Associates has established strategic partnerships enabling us to expand our reach and engage with a broader demographic, fostering awareness of our services. In alignment with the Consumer Duty, we prioritise customer interests, transparency, and fair value throughout the distribution chain.
The referral sources, categorised as Introducers, and Lead Generators, undergo a due diligence process and adhere to principles outlined in the appropriate agreement/contract before establishing relationships. Commercial terms with partners reflect factors such as customer access and alignment with the target market ensures fair and mutually beneficial agreements. Notably, all customers benefit from standard terms, and certain partners may receive fee waivers or reductions, enhancing overall customer value without compromising service standards.
A range of communication channels are available to accommodate and support customers in their interactions with us.
Equity Release Associates’ equity release service comprises a whole of market service which allows us to explore all available options and recommend a suitable solution based on the customer’s preferences and priorities.
We also remain in contact with our customers each year after their equity release plan completes to offer a free plan review. Our advisers consider
any Early Repayment Charges and fees, and if it is not beneficial to the customer to switch plans and achieve a better outcome, we will advise our customers of this.
Following an equity release enquiry, where a standard mortgage could be a viable option, we would advise the customer to explore this. We would offer the support of referral partners within the Age Partnership Group, ensuring due consideration to this avenue as an alternative to equity release.
We do not sell customer data to any other company. We only pass customer data to providers, printers, appointed legal representatives and lenders to enable us to execute our advice.
Equity Release Associates demonstrates fair value through a customer-centric approach, prioritising transparency and disclosure. Partnerships are structured to be mutually beneficial, considering factors like customer access and competitive positioning. The Fair Value Assessment ensures consistent, impartial advice for all customers, with ongoing support through annual plan reviews. Our commitment to data privacy, not selling customer data, and sharing it only for essential purposes reinforces our ethical practices. Regular policy reviews reflect adaptability to market changes, collectively establishing a business model that embodies fair value for customers.
The Fair Value Assessment assures impartial, professional advice for all customers, with considerations for differential terms having no impact on
customer value. Oversight and responsibility for pricing lie with key stakeholders, and undergoes annual reviews to uphold fair value standards.
Enhanced Services:
Due to the age demographic of our target market, we offer a range of communication channels including a face to face service, video call, telephone, email and written correspondence to accommodate and support customers in their interactions with us. Customers are provided with a dedicated adviser and customer support specialist personal to their enquiry. The customer is provided specific contact details to communicate directly with these people.
For customers wishing to utilise our face to face service, where available this is offered to customers that may benefit from receiving advice in the
comfort of their own home.
Face to face appointments are recommended by Equity Release Associates where we have identified a customer as potentially vulnerable and for
those that may benefit from additional support during their interactions with us. Customers with characteristics of vulnerability will be offered access to these additional features, the remainder of our customers may be offered these services if they are appropriate for their needs and we have sufficient resource available to us to deliver them in a timely manner, but not all customers will require or be offered a video or face to face
appointment.
Post completion of the product the customer becomes the customer of the lender. However, Equity Release Associates continue to support customers in reviewing their product to ensure it remains fit for purpose.
Equity Release Associates exhibits a commitment to fair value by offering a diverse range of communication channels, ensuring accessibility for customers in various situations. Face-to-face appointments are recommended for potentially vulnerable customers, demonstrating a proactive approach to support. The flat fee structure, reflects transparency and consistency. Ongoing support post-completion further evidences our commitment to ensuring products remain suitable for customers, contributing to a holistic representation of fair value.
Vulnerable Customers:
The FCA define a vulnerable customer as ‘someone who, due to their personal circumstances, is especially susceptible to harm, particularly when a
firm is not acting with appropriate levels of care.’
Vulnerability can come in many forms, be temporary, sporadic, or permanent. Although many people in vulnerable situations would not diagnose themselves as ‘vulnerable’, we have robust systems, controls and guidance to enable colleagues to identify potential vulnerabilities and adjust their
approach to support our customers during their interactions with us.
We have a comprehensive ”Dealing with customers with characteristics of vulnerability” policy in place which covers our approach to dealing with potential and actual vulnerabilities, this policy outlines how our standard processes are adapted considering vulnerabilities which may result in further steps or additional time required on behalf of the customer.
Our range of communication channels have allowed us to adapt our service to ensure that customers with characteristics of vulnerability receive a service that enables them to access all the same benefits and products as all other customer groups.
As part of our vulnerable customer process we offer a selection of adaptations including face to face advice for customers who would prefer to be visually guided through their advice, additional time to think about the recommendation, ask additional questions or conduct further research,
additional support by appointing a third party such as a friend or family member to assist and advice via video calls for those who are comfortable using technology but would prefer to be visually guided through their advice. These adaptations are offered where a potential vulnerability is identified, the use of these adaptations by our customers is not mandatory and therefore it is possible that customers with similar circumstances will
not utilise the same features as a result of their decisions.
Customers deemed to be vulnerable have access to the same solutions as all Equity Release Associates customers, it is the support throughout the relationship with us that is enhanced. Vulnerable customers are not disadvantaged by the additional steps Equity Release Associates deem to be necessary and we will only take additional steps where it is required to protect the customer from a potential poor outcome.
Equity Release Associates’ commitment to addressing vulnerability aligns with the FCA’s. Our robust systems, controls, and guidance enable the identification of potential vulnerabilities, ensuring an adjusted approach to support customers during interactions.
Customers deemed vulnerable have equal access to solutions, with enhanced support throughout the relationship to prevent any disadvantage. If
understanding cannot be evidenced, and all support options are exhausted, we refrain from proceeding, showcasing a commitment to fair value by prioritising customer well-being and ensuring a tailored and supportive experience for vulnerable individuals.
Regular Reviews:
It is vital that Equity Release Associates understands its customers’ needs and gathers feedback on the service that has been provided as this can be crucial to highlight any areas that may need to be developed or improved within the customer journey.
We regularly assess the utilisation of our service by our customers and identify new enhancements through assessment of the positive and negative Happy Customer Index (HCI) responses, Trust Pilot and complaints feedback we receive. Our HCI is similar to the industry’s Net Promoter Score but has been created as an inhouse tool.
We believe our benefits to be of good utilisation which is evidenced through listening to our target market to ensure we provide a market leading
service which meets their needs.
We regularly review the appropriateness of our service. We conduct reviews and hold regular meetings and committees with key stakeholders across
the group to discuss vulnerable customer MI, customer feedback, withdrawal data, and the regular assessment of complaints MI and we consider a wide range of information including the timescales to completion, current or emerging trends within the business and the wider industry, the customer journey and the suitability of our advice.
The group has a Consumer Duty Committee intended to review changes and improvements to ensure we balance risk with good customer outcomes
paying particular attention to the governance of products and services, price and value, consumer understanding and consumer support.
The Committee is mandated to ensure that strategy and processes are and continue to be, robust and fit for purpose to mitigate risk and deliver fair
customer outcomes in line with the Consumer Duty.
All information is discussed at the most senior level within the business and we are committed to continued development and progress, we also use this data to assess if our processes remain suitable for our target market.
The Consumer Duty Committee, comprising of key decision-makers, further ensures robust processes and strategies, balancing risk with positive customer outcomes. This commitment extends to senior-level discussions, fostering continued development and progress, and data analysis helps
assess the ongoing suitability of processes for the target market evidencing adherence to the Duty. This comprehensive approach highlights our dedication to delivering positive customer outcomes.
Additional services:
In some instances, Equity Release Associates receive additional payments from lenders or third parties, such as solicitors who are on our
recommended panel, in support of our marketing activities and to further promote the equity release market through consumer education and the enhancement of our service. These payments do not relate to individual customers but are rather set monthly/quarterly fees. Such payments will not
influence our decision to recommend a particular lender or solicitor.
During the Equity Release process customers are provided information on Lasting Power of Attorneys, Home Insurance and Wills. A customer who opts to use any of the additional services offered will receive full information of the fees involved during the additional product journey, provided by
our referral partners within the Age Partnership Group. The fair value of these services has been assessed separately to ensure the Age Partnership
Group continues to provide fair value and low risk of harm to customers.
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