ERC looks to be focus for equity release

In May, equity-release trade body Safe Home Income Plans relaunched as the ERC following its decision to expand its membership to include advisers in December.

The organisation previously represented only equity-release providers but it has now opened up to other professions working in the sector, including lawyers, surveyors and other parties.

The move has been welcomed in the main but fears have been raised about the potential for conflict, with different groups pulling in different directions to serve their own interests.

Equity Release Advice managing partner Stuart Wilson says: "It is a positive move but there is a concern about how they are going to bring together all of the different views without it turning into a massive bun fight. It is too early to judge if they can be successful at it."


The industry has been criticised for lacking a single voice. For a market worth around £1bn, it had a big number of very small organisations trying to speak on its behalf. Apart from Ship, there was the Society of Equity Release Advisers, the Equity Release Solicitors' Alliance and the Independent Equity Release Advisers Alliance.

Bower Retirement Services equity-release planner Simon Chalk, who is in the process of joining the ERC, believes there were too many voices for a sector that is around 130 times smaller than the mainstream mortgage market.
He says: "There is always the potential for conflict when you have a body which represents the interests of many different parties but you have to bear in mind that the sector is worth £1bn a year, so you cannot afford to be split into sub-groups. That way, you would never drive the sector forward."

Retirement Plus managing director Duncan Young believes so many different groups could actually help the industry come to more rounded conclusions and innovations. He says: "You want diversity within a trade body to get a more rounded conclusion. This will strengthen the organisation."

One thing that is striking about the sector is how much its participants believe in its potential to grow to service those in or nearing retirement.

More 2 Life managing director Jon King believes this shared common goal will make it easier to come to agreement on most issues. He says: "Everyone has got one common agenda, which is everyone wants to see equity release become a mainstream product. We are still only a £1bn market and we are still not scratching the surface. All the organisations I am aware of want to grow the sector, which will help drive the Equity Release Council.

"The ERC has the opportunity to be the voice of the industry, which is what has been missing to date. I am convinced this will grow the sector."


Wilson, although cautious of the difficulties the ERC might experience, believes having a single body will make the sector more professional looking, especially when dealing with politicians or lobbying. He says: "Now there is one place to speak on behalf of the sector. Before, politicians did not like all of the fragmentation in the sector when consulting it - it made us look very amateur."
Some advisers are concerned that their voices will not get heard over some of the other, bigger members.

Chalk believes advisers cannot afford not to sign up to the new organisation but is concerned about how much say they will have. He says: "If you are an equity-release specialist, how are you going to demonstrate you take your job seriously if
you are not a member of a professional body that is bespoke and tailored for your market? Advisers have to join it from a reputation perspective. It is fundamental advisers get a say and it is vital all parts of the food chain are represented equally."

Chalk adds the organisation's focus should be equally split between lobbying and product development. He says: "I hope it does not get so politically facing that it does not sacrifice development of new products and initiatives.

"I would like to see an equal weighting giving to lobbying and development."

ERC director general Andrea Rozario has made assurances that all parties will have a chance to steer policy in the new organisation through various working groups.
She says: "Stakeholder feedback has directly helped us to come up with a structure for the new organisation that will ensure that all voices - from providers to advisers and solicitors - are heard and have the opportunity to feed in information and ideas.


"The organisational structure of the council means that we have established groups whose role is to look at specific issues facing the market."


The make-up of the organisation will include the Ship standards board, to maintain safeguards for consumers, and a project committee which will oversee working groups to help steer the ERC."

Article appeared in Money Marketing Online (Web)
14 June 2012

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