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The Senior Australians Equity Release Association of Lenders (SEQUAL) is working with Treasury and industry organisations to develop cost-effective financial advice regarding reverse mortgages, according to its chief executive Kevin Conlon.
As part of phase two of the national credit reform legislation, SEQUAL is working with Treasury and industry bodies such as the Financial Planning Association and the Australian Securities and Investments Commission to define the scope of advice appropriate for using reverse mortgages.
They hoped by doing so to reduce the cost of financial advice on reverse mortgages and increase its access for consumers, Conlon said.
Speaking during the release of a SEQUAL/Deloitte survey on reverse mortgages last week, Conlon said there had been a reluctance in the past from consumers to seek out full financial advice regarding the use of reverse mortgages because of the costs associated with the advice.
“I think the important work here is to determine whether there is a subset of a full financial plan that would be appropriate to these transactions and to scale it to these deals.”
SEQUAL has also had to introduce initiatives enabling people other than planners to see if consumers were making fully informed decisions about reverse mortgages, Conlon said.
“It may not be full advice that’s required, but there needs to be a proper process that looks at key elements that affect these transactions.”
He hoped that an equity release financial advice model would emerge, which was similar to the model used in the United States market, Conlon said.
