The equity release industry can often seem like it is perpetually in the throes of an identity crisis. Clearly, we have a strong and active trade body, in the guise of the Equity Release Council, however how recognisable are the brands that operate in the sector? If you were to go out on the street right now and take a poll of over-55s, how many of them would be able to name one equity release provider active today? I suspect the numbers would be low, indeed you could ask financial advisers (who don’t provide equity release advice) the same question and find a similar set of results.
Now given that the vast majority of business is conducted via advisers anyway you might think this is not a particularly relevant issue to raise. After all, customers are placing their confidence in the adviser and if they are recommending a provider then there is an assumption made regarding such things as financial strength, service quality, etc. However, talk to many equity release advisers, and they will be of the same opinion – if there were more larger, well-known financial services brands active in the equity release space it would make the ‘sell’ that much easier. An adviser wouldn’t necessarily be recommending that particular provider but simply having them active in equity release might provide a greater deal of confidence that the products were ‘safe’ and that they could ‘trust’ other market participants.
Which neatly leads me on to the recent news that Saga has joined the Equity Release Council. Now while I accept that Saga are not a provider of equity release products – in fact they offer an advisory service via Just Retirement – the fact we cannot deny is that the Saga ‘brand’ holds a considerable cache amongst its target market of over-55 year olds. Indeed, one might even put it on a par with an organisation such as Which? in that it is widely held to be independent, well trusted and continually working in the best interests of its members/subscribers.
Therefore, while Saga has been active in equity release for some time, the fact it is now a fully-fledged member of the trade body and is abiding by its rules and regulations further adds weight to the status of equity release as a trusted product area that the over-55 market should not be suspicious of. Indeed, there is nothing to say that Saga won’t become a provider of equity release products in its own right at some point in the future although this is pure speculation on my part.
What Saga’s decision shows is that established and well-respected brands should not be frightened of, or shy away from, the equity release market. It further proves that our regulated sector has progressed considerably from the semi-related products of 20/25 years ago and the poor reputation they established. Prospective providers should not be put off by a perceived reputational risk and a feeling of guilt by association. Instead they may look to follow Saga’s lead and determine that demand for such products can only go one way given the drivers that exist in UK society both now and in the future.
