A survey conducted by Paradigm Mortgage Services has found a growing level of interest from advisers in the equity release sector.
96% of all adviser respondents to the survey said they believed equity release products can help solve issues such as a client’s lack of pension savings or dealing with an interest-only mortgage in retirement or paying off other types of debt after they have finished working.
However, there appears to be improvement needed in terms of utilising the equity release solution and ensuring a wider range of clients are aware of the product and the potential benefits it could provide.
Only 33% of respondents were qualified, or had a qualified individual within the firm, to offer advice on equity release while only 10% said they proactively marketed their services in this sector. When asked why equity release advice was not a top marketing priority, a number of advisers suggested the products were currently expensive for clients or they were currently focused on other market opportunities.
However, of those who are not currently qualified 50% said they were interested in obtaining the necessary qualifications.
A third of advisers currently refer their potential equity release clients to outsourced specialists however most said, where possible, they would prefer to deal with them in-house. Those that do refer tend to choose specialist equity release or financial advisers.
Meanwhile, two-thirds of all respondents said they would appreciate help in developing an equity release business plan which would deliver a new profit centre for their business.
The survey was sponsored by Just Retirement with one respondent winning a new ipad from the provider. The winner was Gary Clarke from Bournemouth-based adviser firm Oakwood Independent Mortgage Consultants.
Bob Hunt, chief executive of Paradigm Mortgage Services, said: “Our survey on this sector has certainly highlighted a growing interest in equity release advice whilst at the same time most respondents acknowledge they have work to achieve in order to make it a flourishing part of their business. There is certainly a belief in the solution that equity release can provide for those in, or reaching, retirement and needing to raise cash in order to either boost their standard of living or deal with problems such as paying off debt or funding long-term care provision.
“However, whilst advisers are aware of equity release products and their potential far fewer than half are either qualified to advise themselves or have someone in their firm who can do the job. Of course the referral option is always available however most respondents suggested they would like to deal with clients in-house. Paradigm is working with providers and specialist advisers in this sector to make both options available to our members. We want to support those seeking their equity release qualifications whilst at the same time offering those who wish to refer access to those specialists who can complete the case in a timely and professional manner.
“We’re also enthused by the fact over two-thirds of advisers are looking for support in this area and, to that end, we will be seeking to deliver that support via a number of events, webinars and relevant updates. Certainly, as the number of people retiring increases along with the length and costs of retirement we envisage equity release becoming a far more popular and necessary part of an adviser’s toolkit. This is why Paradigm is looking to support our firms in as many ways as possible to help advisers deliver consistently in this area.”