Does Equity Release Need Rebranding

Does Equity Release Need Rebranding.

The Financial Conduct Authority (FCA) is concerned with the lack of competition and lack of new entrants in the equity release market.

The biggest asset the majority of people own is their home and whilst people may live frugally in retirement with small pension pots and running down their savings, many do not consider equity release and in some quarters it is considered "a dirty word".

Why is equity release unpopular?

People do not like to have debt, particularly when they have retired.

People are worried about being forced to move out of their property.

People see their property as the major asset that they wish to leave to their loved ones as an inheritance.

In the early 1990s there were some equity release scandals. Some older style equity release schemes did not protect the consumer in the event of negative equity and there were some very high profile pensioner evictions. No wonder equity release are "dirty words" and people are fearful of the same.

Despite this, the industry is now regulated, financial advisers are required to have equity release qualifications and virtually all equity release schemes have a "no negative equity guarantee". This means that people do have absolute security when considering an equity release scheme.

How the regulator can improve the numbers of equity release schemes available, thereby boosting competition which in turn will reduce costs is difficult to see.

 Rebranding?

We suggest a total rebranding is required. The terms "equity release", "lifetime mortgage", "retirement mortgage" and "home reversion scheme" are all very negative terms. They do not inspire trust or confidence. Perhaps, the regulator should be seeking marketing guidance from the leading advertising houses and brand awareness groups with a view to renaming equity release to something more positive. Even something more positive such as: property bond, equity bond, equity account, property account and property security may give a more positive outlook to the brand that is equity release.