All clients considering an equity release product will need to have at least one face-to-face meeting in person with a solicitor before taking out a plan.
The change, which came into force on 19th April, marks a change to pre-pandemic requirements and follows a temporary amendment to the Equity Release Council’s rules which have been in place since April 2020.
The temporary lifting of the rule was introduced to allow customers to access funds during lockdown and social distancing measures.
The Equity Release Council said existing cases which are still in progress and have used this temporary amendment must be completed by 31 July.
David Burrowes, chair of the Equity Release Council, said: “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.”
Claire Barker, CEO of Equilaw and non-executive director of the Council, added: “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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