Equity Release Schemes in Jan 2022: Independent Advisers or Direct Providers

Independent Advisers vs Direct Providers -- Which Should You Go For?

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

Equity Release Schemes Are Designed to Be a Lifelong Commitment, so It's Important to Take Into Consideration Whether You Should Select an Independent Advisor or a Direct Provider. And in This Article, We'll Tell You Just That!

Before You Start Reading...

Let's See How Much You Can Release 👇


Equity Release Calculator

Value of Your Home?


Drag me

🔒 100% Secure & Fast. Takes Just 8 Seconds.

As Featured In
yahoofinance marketwatch
Audio Thumbnail
Sound Bar
Equity Release Schemes: Independent Advisers or Direct Providers

Are you considering joining the 1000’s before you who opted for equity release, but don’t know who to turn to? Fear not, there are experts who can guide you through the process, finding you the best opportunities for you and your family.

The million-pound question is: do you opt for an independent financial adviser or a direct provider who offers advice? We’ve got the answers.

Through this article, you’ll discover:

  • The difference between an independent adviser and a direct provider.
  • What to look out for when finding a financial adviser for equity release.
  • Essential questions to ask your adviser.

Our expert team has reviewed over 200 equity release plans and determined how to find the best possible route to the top plans. Here’s what we found!

equity release scheme

What are Independent Financial Advisers?

Independent financial advisors (IFAs) are professionals who give independent advice on financial issues and advise their clients on the best available financial products from the entire market.

When it comes to releasing equity from your home, you must find a financial adviser that specialises in equity release products.

What are Direct Providers?

A direct provider is an equity release lender that offers advice along with your equity release product. They will select a plan for you, based on those available through that particular lender.

Must read: Why Is It Essential to Get Equity Release Advice?


Should I Choose an Independent Financial Adviser or a Direct Provider?

You should generally opt for an independent financial adviser when looking for equity release advice. The reason for this is they have access to the entire equity release market, instead of only parts of it.

old couple

8 Things You Want to Consider When Looking For an Equity Release Adviser

For those considering releasing some of the equity in their houses, getting proper equity release advice is essential.

Here are some criteria to look for in an equity release adviser:

Are They an FCA-Regulated Equity Release Adviser?

To begin, make sure that he or she is regulated by the Financial Conduct Authority1 and is qualified to provide equity release advice.

Are They Able to Offer Advice About the Entire Equity Release Market?

Check to see if the equity release adviser is a whole of market and independent adviser. This means they have access to all current equity release plans and aren’t limited to a small number of products or a few suppliers, ensuring you don’t miss out on a plan that could be appropriate for your needs.

Can They Provide a Face-to-Face Equity Release Consultation?

Make sure your equity release adviser can provide you with face-to-face assistance. Making the decision to release funds from your house is a big one, and it’s difficult to go over everything in depth over the phone.

In addition, during Covid-192 times, you might want to also check if they offer virtual consultations.

Are They Willing to Include Your Family in the Advisery Process?

Make sure your adviser promotes your family’s participation and is willing to include them in your face-to-face meetings. It’s critical to discuss equity release with your family, and you should never be deterred from doing so.

Can They Give You a Free Initial Consultation With No Obligation?

A competent equity release expert will provide a free, initial no-obligation consultation, during which you can learn if you qualify for a lifetime mortgage or a home reversion plan, as well as how much money you could release.

free consultation

Can They Help You Examine All Alternatives to Equity Release?

The greatest equity release advisers will always advise you on the equity release alternatives, such as grants, benefits, traditional loans, savings, and other options. They will only advise you to apply for a lifetime mortgage or a home reversion plan if it is the best option for you and your family.

Have They Garnered Any Awards in This Field?

If your adviser has earned an award for the quality of their guidance, you can rest assured that you are in good hands; look for award badges on their website or literature.

Are Their Plans Compliant to The Safe Home Income Plans (SHIP)?

Select an equity release adviser who only suggests SHIP-approved programs or those that offer the same assurances. You may rest assured that you will never lose your home or owe more than it is worth.

Equity Release Schemes Independent Advisers or Direct Providers

6 Questions You Should Ask Your Equity Release Adviser

How do you know whether you’re getting good financial advice and what to look for in an equity release adviser? Asking your adviser some questions and testing their knowledge in the equity release sector is a smart place to start.

1. Do You Provide Advice on All Types of Equity Release Options?

A home reversion plan and a lifetime mortgage are the two primary types of equity release plans now offered.

By asking this question, you should be able to determine whether they are affiliated with a certain lender or are providing recommendations based on the entire market.

The more lenders they work with and the more programs they offer, the less shopping around for the best bargain you’ll have to do!

2. What are the Expenses of an Equity Release Plan?

When considering an equity release strategy, there are several fees to consider from a variety of sources.

Lender Fees

  • A one-time valuation fee that is almost certainly non-refundable.
  • An arrangement charge may be added to the loan amount, but it may also be subject to interest.
  • Interest will be charged on a lifetime mortgage. The interest will roll-up if it is not serviced, which means the amount of interest charged will increase year after year.

Solicitor Fees

  • For an equity release plan to be set up, you must first get legal counsel from your solicitor3.

Equity Release Adviser Fees

  • A one-time cost that is almost certainly non-refundable.
  • A completion fee is typically charged for advising and securing financing.

Learn all about: Equity Release Costs


3. Is the Equity Release Council Going to Protect Me?

It’s critical to know if any equity release plan your adviser advises complies with the Equity Release Council4 guidelines and, as a result, provides you with the following protections:

  • Interest rates on lifetime mortgages must be fixed or have a cap that is fixed for the life of the loan if they are variable.
  • You must have the right to live in your home for the rest of your life or until you need permanent care, as long as it is your primary residence and you follow the terms and conditions of your contract.
  • You have the option to move to another property as long as the new property is acceptable to your equity release loan provider as continued security.
  • A no negative equity guarantee must be included in the product. This implies that if the amount left over after paying the agents’ and solicitors’ fees isn’t enough to repay the outstanding debt to your supplier, neither you nor your estate will be obligated to pay any more.

4. How Do You Decide Which Plan is Best for You?

Your adviser should be able to explain their decision-making process for choosing the best plan for you. Essentially, this refers to what their offer is and how they want to serve you. It’s recommended that their advice be written down for you in a physical document known as a suitability report.

Equity Release Schemes Independent Advisers or Direct Providers

5. How Much Can I Borrow On an Rio?

RIO stands for Retirement Interest Only mortgage. These types of mortgages require mandatory monthly interest payments to be made. This differs from equity release in that instead of having a predetermined term when the capital must be repaid, they run until the final borrower dies or enters permanent long-term care.

Any certified equity release expert will be able to provide RIO advice as well. Find out whether yours is aware of them and if they are willing to provide them as part of their service.

6. How Do You Decide How Much Initial Advance and Reserve I Should Have?

The initial advance refers to money that you will receive right now. A reserve facility is a set amount of money that you can borrow from the lender in the future.

It’s ideal to just release enough money to cover any expenses you expect to have in the near future. Any funds you anticipate needing in the medium to long term should be put into a reserve account.

Common Questions

Why You Should Seek Equity Release Advice?

How Much Does an Independent Financial Advisor Cost?

Is There No Way to Release Equity by Going Direct?

How Much Do Equity Release Advisors Earn?

In Conclusion

Equity release is a useful technique for releasing funds from your house in retirement. Some retirees want more funds to cover living expenses, while others use equity release to purchase a second house. In fact, the equity release uses are vast.

If you’re unsure about how to release equity from your property, go to a professional equity release specialist who can explain what equity release is and how it works, as well as walk you through the many possibilities.

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
john lawson profile.jpg

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

See How Much You Can Release 👇

Use the QUICK form below.


Equity Release Calculator

Value of Your Home?


Drag me

🔒 100% Secure & Fast. Takes Just 8 Seconds.

As Featured In
yahoofinance marketwatch