The risk picture
- Compound interest erosion where interest is not serviced
- Means-tested benefit entitlement reduced by retained capital
- Reduced inheritance for beneficiaries
- Early repayment charges, fixed and tapering or gilt-linked
- Property criteria restricting a future move or a later further advance
- Capacity, vulnerability and third-party pressure during the decision
- Jurisdictional difference in availability, law and regulation
The safeguards that counter them
- Drawdown facilities and voluntary repayment allowances to slow the balance
- A benefits check before any recommendation, and releasing only what is needed
- Inheritance protection and early family involvement in the conversation
- Downsizing protection, portability, and clear disclosure of charge periods
- No-negative-equity guarantee and tenure for life on Council member products
- Vulnerability assessment, a second meeting, and independent legal advice
- Jurisdiction recorded on every case and research scoped to verified local data
The regulatory framework
Advising on and arranging lifetime mortgages and home reversion plans is a regulated activity requiring FCA authorisation with the relevant permissions. Advice is governed by MCOB and by Consumer Duty obligations on the advising firm, and requires a specialist equity release qualification in addition to a mortgage or financial-planning qualification. Financial services activity in Jersey, Guernsey and the Isle of Man is supervised by the local regulator, and FCA authorisation alone does not confer permission there.
Consumer Duty in later-life cases
- Products and services: the product category matches the client's need
- Price and value: total cost assessed over a realistic period, not just the rate
- Consumer understanding: compounding, estate effect, benefits and charges explained
- Consumer support: vulnerability supported and post-sale servicing addressed
Independent legal advice
The client instructs their own solicitor, who acts for the client alone, confirms understanding and consent, and completes the legal process for the relevant jurisdiction. The adviser must not instruct or influence that advice, and fee arrangements must not compromise its independence.
Where Equity Fountain sits
Equity Fountain is not authorised or regulated by the Financial Conduct Authority and does not provide regulated financial, legal or tax advice. It provides information, education, verified data and software tools for professional use. The subscribing firm remains responsible for suitability, disclosure and record-keeping on every case.