Equity Release Group (ERG) has called for heightened online accuracy and an “enriched” consumer experience in the sector.
The firm argues that there is a need for an improved consumer experience across the sector, to meet the demands of consumer duty and align to the smart technology now available within the industry.
ERG states that while financial data within the equity release market has been behind in comparison to what is available in the traditional mortgage market, the reality is that more products and online platforms now exist to help consumers research options.
Mark Gregory (main picture), founder & CEO at Equity Release Group, said: “Providing a gateway to more extensive information, online tools, access to comparison websites and personalised deals specifically based on individual circumstances is, we believe, helping to eradicate the general lack of information available.
“Online tools providing flexibility and choice around products, coupled with transparency is a step forward in making it possible for people to begin to understand the different products that might work for them, before then going through to an Adviser. However, we need information available to be 100% accurate in order for consumers to instil trust and reliance in that data and within our industry.”
According to their latest findings following a conducted and co-ordinated UK review of selected websites – excluding data from Equity Release Supermarket – more than 50% highlighted inaccurate calculations, with one major broker being the least accurate of all. Whist this figure is lower than ERG’s survey held last year, with more than 40% surveyed improving their data outputs, progress still needs to be made.
ERG hosted an analysis of 26 comparative websites – offering consumers an online calculator in which they can determine how much equity they can borrow – to understand the accuracy across the market. The research was conducted on the same day and measured against IRESS (a product sourcing tool for advisers), with three scenarios, including the age of the customer, their property value, and their loan to the value of their property (LTV).
MISLEADING
The results of the research highlighted that 15% were completely unsuccessfully (i.e. no data available or no longer existed) yet proceeded to capture consumer’s details under misleading pretences regardless.
A third of those calculators gave lower LTVs and loan amounts than IRESS and Equity Release Supermarket. However, over a quarter of the calculators checked provided higher LTVs and maximum loan amounts than IRESS and Equity Release Supermarket.
BOGUS BORROWING
The erroneous data extended as far as to showcase that a customer could borrow more than the largest loan available within the equity release market. For example – An 85-year-old with a £300,000 property, was offered a loan amount of £181,500, representing a 60.5% LTV, when the largest release available at the time of the study was a £159,075 (53% LTV).
This discovery comes as Equity Release Supermarket has extended its offering this year to provide 21 calculators for consumers, alongside comparison tables which are all connected into one live product database, kept up to date by the lenders themselves.
Its smartER platform also enables consumers to research real-time deals that match their personalised circumstances. Due to the heightened demand for accurate information, Equity Release Supermarket says it has benefited with lower acquisition costs by providing live and accurate information.
“It is still a challenging time for the industry”
Gregory added: “Technology has been the catalyst in our growth journey, powered by the vision for an independent market. Our aim is always to support consumers by providing real-time, accurate data, and to help the wider industry through the provision of smartER technology. We conducted a similar study earlier last year and since then we have seen a marked improvement, however there is still some way to go.
“It is still a challenging time for the industry, however it’s important we collectively drive the best possible consumer standards and we’re here to support any equity release firm in achieving that.”
