Getting Advice
It is prudent, and sometimes a requirement, that independent legal and financial advice is sought before proceeding with such a loan. In this situation advice can be obtained from an accountant, solicitor or other suitably qualified person. These loans are not at this stage regulated under the Financial Services Reform Act and the advice does not have to be provided by a licensed financial advice provider. People who use a financial adviser could seek this advice from them if they and their organisation are willing to provide it. As with anyone else providing advice, fees are likely to apply. SEQUAL
The Senior Australians Equity Release Association of Lenders (SEQUAL) is a self-regulatory body and was set up by lenders themselves to promote ethical behavior by reverse mortgage product providers and to help protect the interests of consumers. SEQUAL has four main objectives which can be found at www.sequal.com.au
The SEQUAL code of conduct sets a minimum level of ethics and consumer protection. It covers members’ dealings with borrowers, borrowers’ families and borrowers’ advisers. The body’s members must abide by its code of conduct. Failure to comply could result in a lender being expelled from SEQUAL membership.
SEQUAL has also established an Industry Accreditation protocol in order to raise the professional standards of the Brokers, Planners, Accountants and Lawyers that assist consumers to make informed decisions about reverse mortgages. Market practitioners that achieve Industry Accreditation through SEQUAL gain the designation of ‘Reverse Mortgage Consultant’ (RMC). The RMC designation forms an important part of SEQUALS commitment to assisting consumers to easily identify properly trained market practitioners.
Not all equity-release or reverse mortgage lenders are members of SEQUAL and it’s not compulsory for you to select a provider who is a member. You might feel perfectly comfortable dealing with a large institution that is not a member, even without the safeguards of the code of conduct.
While your aim should be to find the reverse mortgage product that best suits your needs, a lender’s membership of SEQUAL may provide you with that little extra peace of mind. A list of SEQUAL members and the ‘code of conduct’ can be found at www.sequal.com.au.
Mortgage & Finance Association of Australia
Established in 1980 the Mortgage & Finance Association of Australia (MFAA) has grown to include 13,000 members. They are mortgage brokers, financial brokers, mortgage managers, lenders and originators. Members are required to provide accurate, relevant information in a cost effective manner. MFAA’s goal is to promote the mortgage and financial industry and advocate best practice among members.
The MFAA in conjunction with SEQUAL has developed a ‘code of proper process’ for brokers to ensure customers are provided with accurate and comprehensive information. The development of the code coincides with the increase in the use of brokers for advice among equity release customers. The code provides MFAA brokers with a set procedure that ensures practice among members follows a set of industry standards. The MFAA provides accreditation to professionals in an industry where equity release advisors are not nationally regulated. The code can be found at www.mfaa.com.au
In addition, some members have participated in a SEQUAL accredited training program.
