The equity release sector received a shot in the arm recently in the form of research published by Paradigm Mortgage Services. Its survey found that adviser confidence in equity release as an effective solution for the lack of client pension savings and those carrying mortgages and other debt into retirement stands at an impressive level, with 96% of advisers considering it a viable option. While the findings revealed that adviser interest continues to grow, many respondents acknowledged that they have work to do to successfully incorporate equity release into their propositions.
This difference between the number of advisers recognising the potential of releasing equity and those actually helping their clients utilise the facility is highlighted in other parts of the research. Only a third of respondents were qualified – or had a qualified individual within the firm – to offer advice on equity release and just 10% proactively marketed their services in the sector, preferring to focus their attention elsewhere. Encouragingly, 50% of those surveyed who are not currently qualified expressed an interest in obtaining the necessary permissions. There also exists the option that advisers can establish a referral arrangement with specialists if they don’t wish to handle equity release cases themselves, but Paradigm’s research suggests that advisers prefer to deal with clients in-house where possible.
Along with factors such as an ageing population and higher life expectancy (and subsequently longer retirements) which are likely to see demand for equity release increase, Paradigm’s research shows that advisers are keen to help the sector grow too. It is vital that we as an industry capitalise on this interest and support those advisers who are interested in entering the equity release market. This support can take many forms, whether it be educational seminars and workshops or simply helping advisers understand situations where equity release may be of use. We have long strived to provide both these services for advisers and acknowledge our role as helping raise the profile and awareness of the equity release market as a whole, aside from our own interests. Our sales aids and ‘Just a thought…’ documents are a useful resource for advisers and introducers, as failure to identify the full range of circumstances in which equity release may be of use has been a significant barrier to the market growing as quickly as it could have done.
We have long talked about the capability the equity release market has, but it is time for the sector to start realising that potential. When you consider the convergence of issues such as long-term care funding, pension problems, interest-only mortgages/carrying debt into retirement – set them against the tough economic backdrop and shifting demographics, then factor in the adviser demand that Paradigm has highlighted, it is something of a perfect storm and it would be remiss of all sector stakeholders not to make the most of the opportunity. If more intermediary distributors follow Paradigm’s lead and make resources available to advisers to learn more about home reversion plans and lifetime mortgages, then the stage truly will be set for the sector to grow and grow.
Chris Prior is Manager Sales and Distribution at Bridgewater Equity Release