Even in an environment where there is clear growth in equity release activity, building client banks and developing ongoing referrals is still vitally important. It always has been and always will be.
Much of my focus with advisers is on the methods that can be used to not just generate more leads, but to ensure they are of sufficient quality so they can either be converted or they can be introduced on to other professionals where their needs can be serviced. Of course, the introduction of business works both ways which is why I am continually going on about the importance of developing a strong introducer network that can be educated about the benefits and potential uses of equity release, and is willing to introduce clients on to the adviser where such circumstances arise.
Introducer relationships can come in many shapes and sizes – for instance, I am aware of advisers who have such relationships with caravan/motor home retailers. Without wishing to be ageist, the retailer does tend to see a customer demographic which is slightly older and, again where the circumstances are right, they can introduce their customers to an adviser if they are looking at various options to fund their potential purchase. The adviser in question acknowledges there isn’t a steady stream of clients through this avenue but having that relationship in place does mean that any individuals who do fit, have their details passed on.
But it is perhaps the more ‘traditional’ range of introducer relationships that will be able to bring in more positive numbers going forward, which means a focus on estate agents, accountants, solicitors, and closer to home – mortgage and financial advisers. Indeed, it is the latter group – especially in this new pension freedom environment – which may illicit the most compelling and appropriate leads. That is, if you are able to get through the door marked ‘equity release (mis)perception’ – it would be fair to say that historically the typical financial adviser has not always been too enamoured with our sector and products, however I’m pleased to say that is changing.
Developing those adviser relationships needs an understanding of the financial adviser marketplace and also recognition of the changes it has gone through. This is especially the case for those advisers conducting pension business – you’d be surprised at how many don’t and simply stick to investments. However, for those that are providing pension advice, the recent changes may have thrown something of a spanner in the works.
As it was pointed out at our recent Liverpool adviser debate, previously advisers viewed the sale of the annuity as a ‘door closer’ but that is perhaps no longer the case, and there is now much more responsibility on advisers to look beyond this and take a much more proactive approach throughout a person’s retirement. The reason being that the client will undoubtedly have changing needs and, if they have taken early access to their pension, might mean they will need to review their income at various stages.
As has been pointed out a number of times, retirees might prefer to ‘work through’ their pension pots first before looking at other options, which could include using their house as an asset. Some believe there will be a huge increase in the number of people who max out on the pension drawdown option and will deplete their pots very quickly. What are their options following this? Well, it may well be that equity release becomes an appropriate avenue to follow – however, will financial advisers have the knowledge and relationships in order to point them in the right direction?
This is where equity release specialists, conducting their introducer groundwork now, should be able to benefit. Having these types of relationships will not just mean being on an adviser’s radar but actively being recommended and introduced. Indeed, some might suggest that equity release advisers position themselves as a potential solution to the small pension pot dilemma, not just to clients direct but to those advisers who might increasingly be coming across such individuals.
It may also be that such clients are not willing to pay the larger adviser fees for such advice – where do they go then? If you are offering a more holistic, later life advice approach rather than simply focusing just on equity release, I believe there will be even further business activity to be accessed.
Therefore, the new environment does offer a number of opportunities not just for specialists but for those who want to offer their retiree clients a far more 360-degree service. By talking and developing relationships with financial advisers you should be able to get a clearer view of the areas they don’t cover and the potential ongoing needs of the next generation of individuals moving into later life. Focusing on this should help you deliver extra service strings to the bow and position yourselves firmly at the centre ground of later life advice wants and needs.
