Why mortgage and equity release advisers need to consider 'both sides of the market'

Claire Barker | Managing director, Equilaw
13th July 2018
Claire Barker Equilaw
"We need to work together, as professionals across the field, to ensure customers are receiving the very best outcome."

The growing gulf in service provision between mortgage and equity release advisers, as well as the need for wider levels of knowledge, qualification and authorisation in relation to ER products has been highlighted as an area that should be actively ‘embraced’ by intermediaries in the near-future, especially given that almost a quarter of the national population (or almost 17 million people) will be of pensionable age by 2046.

Speaking at the recent FSE event in Wales, James Young of Hodge Lifetime suggested that advisers who offered later life mortgages but did not have an equity release ‘outlet’ could face substantial ‘problems’ in the future as a result of this omission and bemoaned the current lack of firms offering advice ‘from both sides of the market’. He also emphasised the growing possibility that retirement interest-only customers who had rejected equity release as a ‘step too far’ in the short-term would gravitate towards these products as their circumstances changed.

Indeed, Young’s comments offer a similar conclusion to those drawn by the Council of Mortgage Lenders in June of last year as to the growing divergence in outlook between mortgage lenders (who see borrowing as a means to improve equity and safeguard against debt in retirement) and the ER sector (which sees later life borrowing as a means to that equity). It called upon the sector to develop a more ‘joined-up’ approach to later life lending in order to cater to those customers “who may need to move between the two markets” and looked to the wider availability of impartial advice to further this demand.

I couldn’t agree more that a joined up approach is the way forward and that’s why it’s essential that these conversations are being had and this discussion has begun. We need to work together, as professionals across the field, to ensure customers are receiving the very best outcome.

As the market becomes bigger I’ve no doubt we’ll see more firms, from lenders to advisers to other specialists, entering the space and the quality of advice received by clients at an early stage – from all of us, in each of our capacities - could go a long way towards growing the sector and allowing it to achieve its full potential.

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