I’m not sure which marketing whizz-kid came up with the phrase, ‘Perception is everything’ but they were certainly on the money when it comes to consumers and their buy-in to products and services. It’s always intriguing to look at the luxury brand market in that regard – the perception is often that if it’s more expensive it’s a better product or service when in many instances the manufacturing process is exactly the same for the luxury offering as it is the ‘lesser’ value options.
In the adviser space I remember hearing of an adviser in the US who decided that, come what may, he was only going to work with clients who had over $1m of assets to ‘play with’. This was a difficult decision to make, particularly as he was a new set-up and would no doubt have seen clients with less than this who he might have been tempted to work with. He did not go back on his original plan however and while the first few months of his new venture were tough, eventually he secured a ‘million-plus’ client. This client then began to recommend him to similar individuals, the perception being this adviser was a high net-worth specialist; the business (and his success) grew from there.
The equity release sector is not renowned for consumers having the most positive perception of the products. In fact throughout the history of equity release some would suggest the perception of those operating in the market has been pretty low. Thankfully, the industry recognised this a good few years ago and, particularly SHIP and now the Equity Release Council, have worked concertedly on trying to improve the public perception of the products, advisers and providers. Statutory regulation certainly helped in that regard but it has not been enough on its own especially given the British public’s ‘home is my castle’ mentality and the fear of ‘nasty’ providers only being interested in turfing customers out of their home to sell them at the first opportunity.
Fighting those misconceptions and perceptions of our market has been a full-time job and, even though the value of equity release plans breached the £1bn mark last year, there is still a long way to go to turn potential demand into product take-up. However, I think it’s fair to say that the consumer perception of equity release has undergone a fundamental change (and improvement) in the last couple of years.
It may be that ‘necessity is the mother of invention’ and customers cannot afford to be dismissive of such an important solution to their problems, but I still believe there is not just greater acceptance of equity release but also a greater understanding of what it does and does not mean for the consumer. Again, much kudos should go to our trade body for helping turn that around, but also we should not forget the crucial role advisers have played in holding the hands of, at times, incredibly suspicious clients through the whole process.
If there is a prime example of how consumer’s relationship with equity release has changed it came from Peter Barton of Ashford Solicitors at our recent round table workshop in Plymouth. Peter described how equity release customers previously used to come to see him – sheepish, reluctant, somewhat embarrassed about the fact they were ‘having’ to take out a plan. He painted a picture of individuals “sitting in reception hiding behind their newspapers” not wanting to be recognised as equity release clients. That, he said, has all changed. Now there is no ‘shame’ associated with equity release and clients bound into his offices often bringing friends and family with them – there is no embarrassment about equity release in fact many, who have gone through the whole process, are now the strongest advocates of the sector.
This is certainly a positive for all of us working in the market however I think we all know there is much more we need to do. Moving the sector from specialist acknowledgement to mainstream acceptance requires a further push and even though many of the demand drivers for greater volumes are in place much of the time we will still have to confront negative customer perceptions. One of the ways we can all make a difference is to support our sector’s trade body because while they have done much to improve our position there is still much they can do. A united market works much better than a fragmented one and we will have a much better chance of continuing to win these battles if we all work together.
