What is an Equity Release Adviser?

An equity release adviser, also known as an equity release specialist, is a financial expert who helps homeowners who are interested in equity release. Equity release is a financial arrangement that allows homeowners to access the money tied up in the value of their house without having to sell it. Homeowners can choose to make repayments while still living in their homes. The amount borrowed (plus interest) is repaid by selling the house when the homeowner dies or moves into long-term care. [1]

What Does an Equity Release Adviser Do?

An equity release adviser is a specialised financial consultant who provides guidance to homeowners, typically those in or approaching retirement age, on how to release equity from their property. Here are the key day-to-day responsibilities of an equity release adviser:

• Check Eligibility - Equity release advisers will evaluate a homeowner’s situation to check if they are eligible for an equity release. For example, properties must be over a certain value and homeowners must be over a certain age, typically between 55 and 60 years. They also determine which type of equity release is suitable for the homeowner, whether that is a lifetime mortgage or a home reversion plan.
• Explain Options - If a homeowner is eligible, the adviser will then provide detailed information on the different types of equity release schemes which may be suitable based on your individual circumstances and future plans. Here they will also explain the benefits, risks, and costs involved.
• Application Assistance - Once the homeowner has decided to proceed, the equity release adviser will assist you with the application process. This usually involves filling out forms, gathering documentation and working closely with solicitors, lenders or other parties.
• Ongoing Support - Once the equity release plan is put in place, an adviser may provide ongoing support to ensure that the arrangement continues to meet the homeowner’s needs over time.

What Is the Difference Between a Mortgage Broker and an Equity Release Adviser?

Mortgage brokers and equity release advisers are two types of professionals within the finance sector. However, they specialise in different financial products and services. Mortgage brokers specialise in mortgages. They assist first-time buyers with finding a mortgage lender, help with the paperwork to apply for a mortgage and assist existing homeowners who want to remortgage their home. Some mortgage brokers provide guidance on equity release.

On the other hand, an equity release adviser specialises in equity release products. They generally work with existing homeowners who are looking to release funds tied up in their homes and use them for personal reasons such as retirement plans and home renovations.

Do You Need an Adviser For Equity Release?

Taking out an equity release is a big decision, it can be risky and complicated and needs the assistance of an equity release adviser. Homeowners must get financial advice from a qualified adviser before they consider taking out an equity release plan that meets Equity Release Council standards. [2]

In addition, the Financial Conduct Authority (FCA), the UK’s regulatory body for the financial market, also requires homeowners to seek advice from a qualified adviser. According to a survey, 26,119 customers took out new equity release plans in 2023. [3]

The advantages of consulting with an equity release adviser include:

1. Make Informed Decisions - Equity release advisers understand the field, the different types of products available and the latest regulations. Their expertise is crucial in helping homeowners make informed decisions.
2. Tailored Services - Equity release advisers are aware that every homeowner’s situation is different. They provide tailored advice and recommendations based on the homeowner’s circumstances, needs and motivations to craft the best equity release plan.
3. Access to Better Deals - Equity release advisers also often have access to a wider range of products than those directly available to the public. They can potentially find products with lower interest rates or more favourable conditions.
4. Mitigate Risk - Equity release advisers also make homeowners aware of risks associated with equity release, such as the impact on inheritance, effects on means-tested benefits and other benefits as well as the potential for negative equity. This allows homeowners to manage and mitigate risks effectively.

How Much Do Equity Release Advisers Charge?

Fortunately, most advisers offer an initial consultation free of charge. If homeowners decide to go ahead with the equity release process, the costs of an equity release adviser can vary based on the adviser’s expertise, the specific services provided and their location.

Equity release advisers charge one of the following types of fees:

• Fixed Fees - Most equity release advisers charge clients a fixed fee for a specific service, ranging from £500 to £1,500 or more. Some advisers have a capped fee, so homeowners won't have to pay more for what they borrow.
• Percentage Fees - Other advisers charge their clients a percentage fee based on the amount of equity borrowed. This rate typically ranges between 1% to 3%. For example, if a homeowner borrows £100,000 and the adviser charges a 1.5% fee, the homeowner would pay £1,500.
• Combination - In some cases, equity release advisers charge a fixed fee for the equity release application and a percentage fee when the released equity is in the homeowner’s account.

How To Find an Equity Release Adviser?

For a smooth equity release process, you should choose a qualified and experienced adviser. To help you find one, follow these guidelines:

1. Ask family, friends or colleagues - Using an adviser is common amongst homeowners, reaching out to family, friends or colleagues to hear about their recommendations and positive experiences.
2. Look For an FCA Status - Most equity release advisers are required to be authorised or registered with the Financial Conduct Authority (FCA). You can search for FCA-approved advisers in your local area here. Alternatively, if you have a specific adviser in mind, you can check their FCA status here.
3. Check For Other Qualifications - Along with being FCA-approved, reliable equity release advisers tend to have other qualifications or trade body memberships such as the Equity Release Council.
4. Read Customer Reviews - Look at online reviews from previous customers, this provides a good insight into an adviser’s reputation and client satisfaction.
5. Book a Consultation - If you want to speak with an equity release adviser, you can book a free consultation to discuss your financial goals and ask them questions.

What To Ask an Equity Release Adviser?

Once you have found an equity release adviser that you are happy with, it is worth asking them the following important questions:

• What type of equity release products do you offer?
• What does the equity release process involve?
• How much can I borrow?
• How does equity release affect my current or future benefits?
• How much do you charge?
• Should I be aware of any other fees such as set-up, legal or valuation fees?
• Can you access equity release deals from all lenders?
• Is there a ‘no-negative equity’ guarantee?
• Can I move homes if I take out an equity release plan?
• What are the risks associated with equity release?
• What documents do I need?
• What happens if I need more money in the future?