Advisers need to take responsibility for equity release education, argues Peter Welch, head of sales and distribution at Bridgewater Equity Release
When Bridgewater recently conducted a survey of equity release advisers we asked them what actions were needed in order to kick start the market. The response came back very strongly that more consumer education was needed. And personally I’m firmly in agreement with this point of view.
However, my views may differ from advisers when it comes to who should take responsibility for delivering consumer education. As a specialist provider relying solely on intermediaries for new business I would argue that if advisers expect an upturn in new business they need to increase their focus on helping customers better understand where equity release can help match their financial needs in retirement.
Rather than talk specifically about equity release I would encourage advisers to ‘speak’ to consumer needs and concerns in all the messages they put out. For example, ‘fuel poverty’ is of increasing concern to the retired and therefore a very appropriate topic to cover with clients. It may well be that advisers are able to use their local press and network to deliver topical help and support to those who may be worried about the cost of energy.
Certainly, from recent reports it seems likely that fuel and energy concerns are only likely to grow, specifically amongst pensioners who often have set levels of income which they are unable to increase to fund price hikes.
Recently, it was reported that the coalition government has major plans for cutting the basic winter fuel allowance by £50 for new recipients and £100 for the oldest. Plus, with the state retirement age likely to move up to age 66 it’s widely assumed that eligibility for the winter fuel allowance will also move. Instead of being eligible for the payment at 60, new recipients will have to wait a further six years until they are 66.
Also, in the news last month was the announcement that a major energy supplier had made a 2.6% increase in electricity bills for 1.2 million of its customers as a result of increased transmission costs. As we move into autumn with the memory still fresh in the mind of the last Winter’s prolonged cold snap elderly people are clearly going to be concerned about meeting all of their energy bills.
It is on such issues that advisers can provide real and valuable information be that face-to-face, through talks to local groups, or via press and advertising. If advisers are talking about fuel poverty, make sure you encourage consumers to check they’re claiming all their eligible state benefits as well as taking advantage of the energy efficiency grants available to the retired.
Also, for those people who are owner-occupiers, trading down to a property with lower running costs may be an option worth considering. Naturally there are those who don’t want to move and they may want to consider using part of the equity in their property to provide some much-needed extra income.
In which case point out that you are an appropriately-qualified equity release adviser who is able to help. You should also make them aware of the importance of dealing with a SHIP provider who can provide them with the full range of protection.
The above demonstrates a simple example of consumer education which any adviser could take out into the community. It is certainly not a hard sell of equity release products which consumers do not want instead it is advisers tackling some of the key concerns pensioners have and outlining some of the potential solutions for such problems.
This type of consumer education is the responsibility of all industry stakeholders but it is perhaps advisers who have the immediate and local one-to-one contact who are best placed to deliver.