In almost every consumer poll I have ever seen, one of the ‘criticisms’ of the sector is that many individuals appear somewhat clueless when it comes to accessing the sector. Given that the first door through which they have to pass tends to be the advisers’ then a conclusion often arrived at is that the advisory sector is not particularly adept at getting itself seen by its potential customer base.
Part of the reason for this may in fact lie in the numbers of advisers actively offering advice in the sector. In a recent poll nearly two-thirds of advisers said they did not have the necessary qualifications to advise on equity release while the Equity Release Council’s own figures seem to suggest that, while 7,000 individuals have passed the necessary examinations, only 2,000 are practising equity release advisers.
I have to admit that, given my experience – and I should point out that I deal with equity release advisers day in, day out – that figure of 2,000 seems a little bit on the ‘rich’ side. It would perhaps be interesting to have a credible adviser figure but, at the end of the day, the main point seems to be that consumers can’t always find the adviser they need in order to secure that much-needed advice.
Of course, we all know that this is not a sector that requires a specialist equity release adviser on every high-street but we might certainly believe we should have an adviser/intermediary/introducer on every high street who has access to an equity release specialist, and understands the needs of those clients who may well be suitable for an equity release product.
Many customers visit an adviser, perhaps a financial one or a mortgage intermediary, and have no clue that equity release could provide a solution for their current needs. As a very wise man once said (I forget who) no-one wakes up and says, “I really want an equity release product”.
Instead they wake up with a letter from their current lender requesting payment in full of the capital outstanding on their interest-only mortgage, or they wake up and realise they have no money to fund their long-term care needs, or they wake up and look around their home and understand it is no longer fit for purpose anymore. The list goes on. These are all wants and needs that can be met by an equity release product but I’m guessing that the vast majority of clients will not be aware of this and certainly won’t be straight on the internet looking for their local specialist adviser.
This is why the building of introducer relationships by advisers is so very important because the chances are that these individuals are going to be seeing these types of clients every single day. The big question is whether they will have the information, knowledge, wherewithal and relationships to be able to make the necessary connections and introduce that client on. Only by specialists nurturing these types of introducers does that type of arrangement become a much greater possibility.
So, for my money, this is not an issue of advisory but introducer numbers. Are there enough professionals out in the field who can recognise the client’s needs and treat them appropriately? It is down to the advisory sector, and providers to help them, reach out to these individuals and develop the introducers’ understanding of equity release. If we can do this then we are certainly on our way to delivering a sector which can cater for greater numbers of customers without necessarily needing greater numbers of advisers.
Chris Prior is Manager, Sales and Distribution at Bridgewater Equity Release
