Education. Education. Education.

“Education. Education. Education.”

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Stuart Wilson | Air Group
4th November 2021
stuart wilson lla
"A renewed education campaign and push at both advisers and consumers should help us grow the understanding on both sides"

Whatever you think of Tony Blair, you can’t deny the quality and cut through of that particular soundbite. Indeed, it is over 25 years since Blair first uttered those words at the Labour Party Conference of 1996 and they still feel wholly synonymous with him.

I’ve been reminded of that particular mantra recently, not least because it cropped up in the ongoing BBC documentary about the relationship between Blair and Gordon Brown.

Most people will be aware of the psychodrama between those two powerful individuals in the lead up to Labour winning power and throughout their time in office, however you’re less likely to know just how fraught it was. To say it was a daily battle fuelled by paranoia, jealousy, faction-building, personality and political clashes, and everything else thrown into the mix as well, would be something of an understatement.

To me though, where it began was essentially a misunderstanding between the two about when Brown might ‘take over’ as Prime Minister and it built, or rather disintegrated, from there.

In a way, it highlights just how entrenched people can get especially when they don’t understand something or have not quite appreciated a moment, or where there is an aversion to gaining knowledge. Again, I was reminded of this when viewing the results of a recent Census conducted by Air Club looking at adviser views on the later life market, and what might be done to help develop it even further.

One of the key themes to come out of the Census was the need for education on all the options available, and this wasn’t simply a call to educate consumers on equity release, retirement interest-only mortgages (RIOs) and other later life borrowing options, but also a need to educate advisers.

Just over three quarters (76%) of adviser respondents said that consumers have a limited understanding of the later life lending market, but 43% said the same was true for advisers. Bear in mind, that on any given day, an older borrower could be contacting those advisers to discuss a need for money and many within the profession believe almost half of their peer group don’t understand the options available.

That is indeed a worry, and that’s before you get into the situation we have with later life lending were many advisers are not able to advise on all the options available to these borrowers. So, we have mortgage advisers who can advise on RIOs and other mainstream products but are not able to provide the same service on a product such as equity release which might be more suitable for them.

The more positive news here is that a concerted education campaign – over a number of decades now it should be added - on equity release has worked (to a certain extent) in terms of consumer awareness and an understanding around what the product can achieve for them.

However, according to our Census, 56% of advisers said the most challenging part of the equity release advice process was still ‘customer reassurance and managing misconceptions’, and therefore it’s clear there is still a gap to bridge.

Take it one step further though. If customers already involved in the later life process require this type of management, then what is the mindset of the wider older homeowner population when it comes to their later life lending options? The likelihood is there will be misunderstanding, suspicion, and a lack of knowledge.

So, it’s clear that our education, and re-education, efforts need to be ramped up considerably, otherwise we’re going to leave behind advisers, who could be benefiting from the business available in this space, and consumers, who require these product solutions.

What we also don’t want, or indeed need, is a Blair/Brown never-ending battle between advisers and the sector, or advisers and consumers, which ultimately gets increasingly fraught and is an ongoing struggle. What we do need is an advisory sector fully immersed in all the later life lending options available; one which fully understands what can be achieved and the most suitable product solutions to achieve this.

This is an imperative because the need and demand for later life lending is only going in one direction. A renewed education campaign and push at both advisers and consumers should help us grow the understanding on both sides and highlight the far greater number of options that are available to those who require them.

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