Time to spread the word of equity release

I read a previous blog on here by Chris Prior that talked about equity release still facing an uphill struggle to change public perception. That’s true, although I do believe significant inroads have been made.

Steve Wilkie
17th February 2015
steve wilkie responsible equity release

The equity release market of today is a vastly different one from the market of the 80s and 90s. It has matured, adapted and innovated to meet the needs of an ageing population. 
 
Equity release is no longer viewed as a cash pool for funding holidays and house extensions. It is now seen as a serious and viable financial solution. 
 
We have seen a growing number of over 55s using equity release to pay off their mortgages for example. It has also been an invaluable financial resource for retirees wanting to boost retirement incomes, which have suffered in this low interest rate environment. 
 
Also, many people we speak to are using equity release to provide an early inheritance – to help provide for their families when they need it most. 
 
 

Equity release has become a mainstream financial solution, and financial advisers could help spread that message and educate the consumer. The problem is that many advisers still hold the view that equity release is an unsophisticated product for an unsophisticated customer. As a result, there is still reluctance amongst financial advisers to talk about equity release with their clients.
 
When we speak to financial advisers, the most common feedback we get is that equity release doesn’t fit their clients’ financial make-up; that the equity release customer is the type of person who wouldn’t have a financial adviser.
 
But research shows that far from being financially illiterate, equity release customers are actually financially sophisticated. They are the type of customer who would have an ISA, income protection, mortgages, or an off-the-shelf investment in their financial portfolio. And, despite the contrary view, they are the type of customer who would have a financial adviser.
 
Many may not agree, but I believe equity release should be considered in the same bracket as these financial products, which sell in volume because they are aimed at the middle classes.
 
They are products aimed at the segment of the population who actively plan for the future, who want to preserve and grow what they have, and need a guiding hand from financial intermediaries.
 
But the view held by many financial advisers still remains, that equity release is a product for those who don’t plan. That’s simply not the case. 
 
Of course, there will always be a section of the equity release market that will use the product to fund holidays, but these are not the individuals who will grow this market. 
 
The growth will come from those investors who have a history of financial planning – people who have bought financial products and saved for the future, but the odds have been stacked against them. 
 
And our research supports this. It’s your clients who are purchasing equity release - those savvy investors who have a history of purchasing financial products, who are comfortable with financial instruments that help them achieve their wealth goals. 
 

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