Recently I read an article online about the potential for the equity release market when the new pension changes come into effect next year. Essentially, there are some in the market who believe the ability of pensioners to have freedom to use their pension pots as they wish might negatively impact on the equity release sector. Who will need equity release when they can use all the cash in their pots, the argument goes. I don’t buy this at all – in fact I firmly believe equity release lending will continue to grow simply because of the demographic and demand-drivers that fuel the sector. Average pension pots are small, the cost of living is high, the State is contributing less, pensioners have more responsibilities, etc – all these mean (to my mind) that many more people will be looking to utilise their home in order to secure ongoing income. Good news for the equity release market and all those playing an active part in it.
However, the article didn’t catch my attention for those reasons, but for a seemingly innocuous comment made by an adviser about those involved in the later life sector. The adviser talked about the small number of avenues that customers can follow in order to obtain equity release advice – a point which is not without its merits – and suggested one of the reasons why the sector had not perhaps fulfilled its potential yet was because later life advisers ‘aren’t always the most approachable of individuals’. As I mentioned, a seemingly innocuous comment but one that puzzled me and got me thinking about where such a thought could have come from.
After pondering this for a while I firstly concluded that, in my experience, the adviser was way off the mark in his comments, but also perhaps that he had encountered a later life adviser, attempted to conduct a relationship with them, but unfortunately it had not worked out as he wished. This is a massive presumption on my part but it seemed odd to tar a whole advisory sector with the same brush when clearly the adviser could only have dealt with a small number of later life specialists.
Clearly, being unapproachable is a reputation no adviser wants to have and again, in my experience, this couldn’t be further from the truth in terms of the later life operators I know. I also suspect I know far more than the adviser quoted in the article. What however is worth considering is his underlying point about the issue of advice demand and adviser supply because I think this could be crucial over the coming years, particularly in the age of ‘pension guidance’ which is undoubtedly going to need sorting out with ‘actual advice’.
The fact of the matter is that we currently don’t have enough later life specialists/experts operating in the market at present. These are the practitioners who are not just equity release advisers but can cover the whole gamut of later life options available to those reaching, or in, retirement. It is in this instance where I feel the sector is missing a trick because, looking ahead at what is coming over the horizon, one can only predict that the need for advice in later life is going to grow and grow quickly.
This is one of the reasons why we have set up the Later Life Academy because we believe that many advisers can see the opportunities that exist in this marketplace but need both practical help and commercial support in order to make their mark. We want to encourage those who are both active now, or want to be participating, to join the Academy and to grow their propositions. We recently announced the appointment of a new National Development Management, Ray McCarthy, who will be well known to those in the sector and will help us drive our message home and ‘convert’ those advisers who may not be offering as many later life services as they potentially could. There is a raft of products – all applicable to those in later life – that many advisers are simply not putting into their toolkit and this has to change if we want to ensure clients have that 360-degree service.
So, while I don’t consider later life advisers to be some of the most ‘unapproachable’ in the marketplace I do accept that there needs to be more of them, accessible to everyone throughout the country and able to provide advice and recommendations on all manner of later life-related products. This is why the Academy is working hard to develop those already active and will also be focused on supporting and encouraging those new to the sector to establish their propositions and make a real difference.
