"While it is difficult to predict exactly how the market will fare in 2020, we think the fundamentals remain strong"
We spoke to Claire Singleton, CEO of L&G Home Finance, about how Covid-19 has encouraged the equity release market to become more digitally-minded and why advisers and brokers need a broad understanding of the at-retirement product space.
FR: You recently started as CEO of L&G Home Finance – how have you found the role so far?
Well it’s definitely been busy! I always think it is great to be fully immersed in a business really quickly and that’s definitely happened. In my first quarter we have dealt with the challenges and opportunities of operating in a Covid-19 environment. I’m pleased that we have been able to support our customers and advisers at this time. This has involved a lot of change to how we operate. Our operation moved to a remote working model and we saw the advice market move to phone or video advice. We spent time with the Equity Release Council on their non face-to-face legal advice process and have introduced a number of improvements to our processes to make these digital rather than paper based. We’ve also made changes to our products to support our customers for example introducing an interest payment holiday on our Optional Payment Lifetime Mortgage. We have been supporting advisers through regular webinars and have also launched a training portal to help advisers achieve their equity release qualification.
FR: How is L&G approaching what is set to be a very challenging year?
For our industry, the nature of work has changed rapidly. We have a responsibility to help advisers and customers navigate this difficult period, to understand their challenges and consider how we can use our resources and expertise to help.
We’ve adapted to remote working by offering desktop property valuations and paperless drawdown processes, and have introduced measures such as payment holidays for our Optional Payment Lifetime Mortgage customers.
Despite these challenges, we don’t want to lose sight of the future, which is why we have kept up our focus on education. We recently launched an online equity release study portal, available for free, which aims to help aspiring equity release advisers and mortgage brokers secure the CII Certificate in Equity Release qualification or equivalent. We’ve made our entire programme of educational events for advisers available online.
FR: How will the equity release market change in 2020?
Equity release was an increasingly popular option before the coronavirus outbreak, with figures from the Equity Release Council showing a spike in demand in the first two months of 2020. While this was partly caused by restored business confidence, it was also due to equity release becoming a more mainstream, established product for retirement income.
While it is difficult to predict exactly how the market will fare in 2020, we think the fundamentals remain strong – housing wealth is at its highest ever, and, for many people, the amount tied-up in their home far exceeds their pension savings. Given the product options are better understood and rates are more competitive than ever, we see equity release ultimately continuing to grow.
I think that one positive to come from this situation is that it has encouraged the equity release market to become more digitally-minded. While face-to-face advice remains important, and won’t be replaced any time soon, it is good that customers have more choice and can access more information online.
FR: What does the industry need to do to improve?
As an industry, we have a responsibility to encourage professional capabilities to evolve, adapting to our customers’ needs as and when they begin to change. Across the retirement sector, there is increasing recognition that advisers and brokers need a broad understanding of the at-retirement product space to give a truly accurate view of what product best meets a client’s need.
We need to create a qualification framework that puts customer needs at its centre, while allowing the sector to respond quickly to developing trends and products. Of course, we also want training to be as practical as possible for advisers, so they can upskill themselves in a convenient way.
We think it is important that equity release product knowledge is built into at-retirement training for all advisers and brokers.
FR: How are you helping vulnerable customers?
With the population spending longer in retirement, many of our older customers face challenges such as cognitive decline, care requirements and susceptibility to scams. Indeed, the latter has become particularly important recently, with scammers looking to take advantage of the coronavirus-induced confusion and anxiety.
We are alert to finding new ways to protect customers when they need assistance, while also ensuring our call centre staff have the support and training they need while working from home to help customers on our 24/7 helpline. We have currently three dedicated initiatives to support vulnerable customers: our Care Concierge service (provided by Care Sourcer), our Customer Assistance Helpline (provided by Health Assured) and our Customer Referral Service (in partnership with the Royal Voluntary Service).
FR: If you could see one headline about financial services in 2020, what would it be?
“Financial advice proves invaluable in steering customers through Covid-19”.