Extra education on equity release
Advisers and consumers will soon have greater access to information about reverse mortgages as the Senior Australians Equity Release Association of Lenders (Sequal) prepares equity release education standards for advisers, and the Australian Securities and Investments Commission (ASIC) launches a consumer calculator on the products.
The education standards for advisers, which are being compiled by the Financial Services Education Agency, include information on risks, situations, product features and variations available in the equity release or reverse mortgage market.
Sequal executive director Kieren Dell said the standards would be used by training organisations to create courses for financial advisers on equity release products.
Dell said that while Sequal’s members were the providers of reverse mortgages, and had no direct control over how the products were sold, the education standards would help improve financial planners’ understanding of the products.
Dell said the Mortgage Industry Association of Australia had already released a training package for mortgage brokers on equity release plans, but it had agreed to modify its course to bring it inline with Sequal’s standards if there were differences.
Meanwhile, ASIC yesterday launched a calculator to help consumers assess reverse mortgages.
ASIC’s executive director, consumer protection, Greg Tanzer said the calculator, which is available on the consumer website FIDO, shows consumers how debt can build up and may affect how much of the home they still own as time goes by.
Tanzer said the calculator showed the likely long-term impact of one of these products on the level of equity in a consumer’s home.
He said consumers could use the calculator to assist in decisions they may make about how much to borrow; whether to take a lump sum, regular payments or a combination; how long to borrow for; what interest rates and fees; and/or changes in home values.
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