"It is clear from our review that advice being offered to such consumers, including some vulnerable consumers, is still not up to scratch."
The FCA has warned firms that they must do more to ensure that they are always giving appropriate equity release advice.
Jonathan Davidson, the FCA’s executive director of supervision, retail and authorisations, said that the advice being offered to such consumers, including some vulnerable consumers, "is still not up to scratch".
In its review, the FCA was concerned that the advice given to take out equity release products could not always be shown to be in the best interests of all consumers given their personal circumstances.
It found that advice given by firms did not always sufficiently take into account consumers’ personal circumstances and that consumers' reasons for looking at equity release were not always challenged by firms.
Additionally, the regulator found that firms weren’t always able to evidence that their advice was suitable.
The FCA concluded that in light of Covid-19 "it is more important than ever that advice on equity release is appropriate taking into account consumers’ individual circumstances".
Jonathan Davidson, the FCA’s executive director of supervision, retail and authorisations, said: “Deciding to enter into a lifetime mortgage is a big decision with a big financial impact for consumers. In many instances it makes sense but whether it does or not depends on personal circumstances and how they might change.
“It is therefore critical that advice offered to consumers looking at lifetime mortgages is suitable to their personal circumstances. It is clear from our review that advice being offered to such consumers, including some vulnerable consumers, is still not up to scratch.
“All firms offering these products should read our review and take action to make sure consumers are receiving advice tailored to their personal circumstances.
“We’ve continued to engage with firms where we had concerns and, as part of our ongoing supervision of mortgage intermediaries, we will be carrying out more detailed follow-up work into the suitability of advice in the lifetime mortgage market.
“If in doubt as to whether a lifetime mortgage makes sense for you as a consumer, you should explore your personal circumstance fully with your advisers or with independent sources such as the Money and Pensions Service.”