In September 2023, the FCA published the key findings from a multi firm review of Later Life Lending. In the review, the FCA continued to find weaknesses in firm standards, and reminded firms that poor quality advice is unacceptable. The FCA will continue to monitor the Equity Release market, and those firms that are in breach of regulatory rules and the FCA’s expectations should expect further scrutiny and intervention.

Coupled with the backdrop of further FCA focus, is the ever-evolving implementation of the Consumer Duty – which has good customer outcomes at its core and is therefore highly prevalent to Equity Release product design and distribution. The FCA has stated that Consumer Duty is “not once and done”. Firms need to be able to demonstrate improvements year-on-year. Not only is change required in the first line, but the oversight, governance, MI and reporting arrangements need to adapt and be effective across the 3LODs, with SMFs clear on their accountabilities and responsibilities for ensuring compliance. Products, services, technology and innovation are constantly evolving, and with that, firms’ Consumer Duty obligations are also. It is, therefore, crucial that firms invest the time and resources required to review the key areas of regulatory focus and ensure good consumer outcomes.

• Suitability file assessments, including ‘check the checker’ file checking assurance, and theme-based file assessments, for example, vulnerability
• Financial Promotions; design, review and approval
• Advice and support to develop enhanced customer journeys
• Complaints handling and assurance
• Remediation exercises, including redress calculations
• Compliance / thematic reviews; review and recommend of the policies, processes, standards, controls, reporting and governance arrangements in place
• Operating model review; review and recommend, ensuring that your operations are set up for success and to appropriately manage risk and deliver on your regulatory, customer, and business strategy commitments