An independent network of equity release brokers has formed to safeguard Australian retirees considering a reverse mortgage.
Known as Fortus, the group will implement strict new processes and a code of conduct around the growing reverse mortgage industry, which has increased its volume by 30% since 2004.
Fortus' chair Craig Swan said reverse mortgages continue to grow in popularity as Baby Boomers seek new ways to fund their retirement. He stressed, however, that equity release products are a specialty area requiring particular skills and expertise, which many mortgage brokers are not prepared to develop.
"Retirees need to be confident that they're dealing with a properly educated and qualified broker," said Swan. "Fortus membership is a badge of quality and assurance to retirees."
All Fortus members are bound by a Charter and must hold a Reverse Mortgage Consultant accreditation from the Senior Australian Equity Release Association of Lenders (SEQUAL), the reverse mortgage lenders' governing body. They are also required to follow the MFAA's Equity Release Code of Proper Process or the CPA Guidance Notes for advising on reverse mortgages.
"It's really the advancement of best practice," said Swan. "Not only are we trying to look at the reverse mortgage market but we're also spreading our catchment much broader. We're interested in equity release products as they relate to seniors.
"If you're specialising in equity release products and you like what you're seeing, then you're a potential member."
The network currently has 40 broker members around Australia, ranging from sole practitioners to multi-staff businesses.