In an effort to tackle the dense fog of financial jargon, the Equity Release Council (ERC) has joined forces with the ratings agency Fairer Finance to unveil a groundbreaking ‘jargon-free’ manual aimed at illuminating the often perplexing world of later life lending.
The newly released guide aims to promote transparency and understanding of financial services, particularly for those dealing with the complexities of equity release and other later life financial products.
Who Stands to Benefit?
The guide offers insights and resources available, including an expansive network of more than 750 firms and 1,900 registered professionals. This includes a wide array of financial advisors, solicitors, surveyors, and other key players engaged in both direct customer interactions and behind-the-scenes operations. Its aim is to serve as a versatile toolkit, enhancing the quality and clarity of financial communications across the board.
The Crusade Against Jargon
At the heart of this manual is a call to arms against the use of complex, industry-specific language that can alienate or confuse consumers. It champions the use of simple, straightforward language and stresses the importance of creating documents that are not just easy to read, but also engaging and accessible to everyone. This approach is particularly vital considering the alarming statistic from the National Literacy Trust, which reveals that one in six adults in the UK has a reading age of 11 or under, falling short of the level required to secure a grade C in English GCSE.
Regulatory Backing and Industry Endorsement
The push for clearer communication is not only a matter of ethical practice but also aligns with regulatory expectations. The Financial Conduct Authority (FCA) mandates that customer communications must be clear, fair, and not misleading—a standard that has only been reinforced by the introduction of the Consumer Duty reforms. Additionally, the Financial Ombudsman Service takes the readability of documents into account when assessing the fairness of firms’ actions in consumer disputes.
Voices from the Frontline
Jim Boyd, the Chief Executive of the Equity Release Council, articulates the manual’s mission as an extension of a longstanding commitment to present information in a manner that is fair, simple, and comprehensive. He highlights the increasing complexity of market options and the critical need for customers to have a clear understanding of their choices.
James Daley, the founder and managing director of Fairer Finance, echoes this sentiment, emphasising the intricate nature of equity release products and the paramount importance of customer comprehension. He believes that the guide will serve as a practical blueprint for lenders and brokers, helping to demystify the process and ensure that financial documents are accessible to the broadest audience possible.