Old style home reversion plans are completely different from the highly regulated equity release plans now available. There are very good independent financial advisers out there who are qualified to chartered level in later life planning and who wouldn’t consider doing something unless in the absolute best interests of a client.
I know this because I am one of these and I specialise in helping vulnerable clients, working alongside solicitors, the courts and other professionals.
If a client needs equity release I will always work with a second IFA so that we can ensure that a client is not disadvantaged in any way at all and, if they have family, we encourage them to be involved every step of the way.
We ensure that they take completely independent legal advice too and that there are always at least two solicitors involved, preferably who are completely independent of each other.
As with anything financial, there are always charlatans and villains who are looking to take advantage of the elderly and vulnerable which is why advice shouldn’t be taken from someone with no proof of track record or visibility on the FCA register. Don’t use someone who has no experience in the later life market as they are highly unlikely to consider the wider implications - sometimes these are mortgage advisers with fewer qualifications and who do not fully understand all of the potential issues (they mean well but can cause problems later on). Finally, ‘advice’ from a bank or building society (or other tied agent) should be checked vigorously as they are usually using a restricted panel or a single product provider and not necessarily accessing the very best available solution.
Equity release is not a ‘one size fits all’ and lots of people have horror stories (me included, although none of my clients I might add). Anyone releasing funds without a good reason, who plans on holding the balance in cash, is, more than likely, making a huge mistake. There are phased solutions and income solutions which may be a better fit; Or possibly a RIO (retirement interest only loan) which means there is no accumulating balance.
Similarly, beware of other schemes and ideas which can leave an individual being accused of deliberate deprivation of assets in the case of long term care, or with no saving on an inheritance tax bill if not done correctly and for the right reasons.
This is something I’m passionate about, despite it forming only a small part of my later life planning work, as it’s an area where the most vulnerable people can be hit hardest.