Adviser members must now complete an extended checklist, which has been increased from 12 to 24 points.
The update comes just after the Financial Conduct Authority (FCA) uncovered failings in the way advisers were giving advice, including concerns over debt consolidation not being properly explored.
According to the ERC the new checklist was issued following a review by its standards board and conversations with major stakeholders over several months and after it updated rules and guidance on 1 January.
It will now prompt advisers to recommend customers review or set up a will and seek advice from a solicitor or qualified person if they do not have a Power of Attorney.
And there is also a process for establishing if a customer has experienced difficulties with their physical or mental health, bereavement, divorce, emotional or financial issues, literacy, numeracy, or any other traumatic event, that may leave them in a vulnerable position.
Chris Pond, chairman of the council’s standards board, said the updated checklist captured the most important points to cover from FCA regulations and Equity Release Council standards.
He added: “The update will help address subsequent feedback highlighted in the regulator’s recent review of the sales and advice process by helping advisers to understand, fulfil and demonstrate the specific needs of each and every customer.
“Coupled with independent legal advice and product safeguards, this financial advice process provides the highest level of consumer protection for any later life property-based loan.
Responding to the updated guidelines, Sara McLeish, CEO of Legal & General financial advice, said: “Equity release is not an ‘immediate needs’ product and the advice process needs to reflect this.
“We welcome the checklist for advisers but also the wider points raised, such as eligibility for state benefits or grants; these are going to be key in the coming months when many people will have to reconsider their financial plans due to the fallout from the Covid-19 crisis.”
“This makes it ever more important for advisers to give really rigorous advice that considers the unique circumstances of each customer.”
