"The industry has certainly stepped up last year by reducing rates and introducing a new product every 28 hours in order to try and keep meeting the needs and priorities of the ever-growing customer base."
FR: Do you think that 2020 demonstrated the equity release market’s ability to adapt quickly and effectively to a changing landscape?
I think it undoubtedly has, with obvious examples being the move to remote working and to remote valuations – two things that our team have really excelled at. For instance, we were able to have our full range of products available to the market through alternative valuation methods within a couple of weeks of the first set of restrictions being announced last, and were similarly swift to react when restrictions eased and a variety of valuation solutions could be offered later that spring.
I think technology has also played a major part in that process as lenders have either overhauled their own systems and offerings and/or have sought to partner with others to streamline advisers’ KFI-to-application journey at a time when the world has moved more digitally than ever. Last year we not only integrated with Advise Wise and Iress to ensure near-instant KFIs and access to real-time data, but also overhauled our online portal and document suite to ensure a straightforward application process and ready access to information streams. In addition, we’ve also introduced new repayment calculators to help demonstrate the benefits of making regular repayments.
FR: How important has ongoing product development been to the wider market during these unprecedented times in terms of continuing to meet customer needs?
I think it’s been hugely beneficial – it’s no secret that more and more people will be looking at ways to fund their retirement in light of recent events, and as an industry we need to make sure we’re providing products that not only cater for their needs now, but also in future years as their circumstances change. The industry has certainly stepped up last year by reducing rates and introducing a new product every 28 hours in order to try and keep meeting the needs and priorities of the ever-growing customer base.
It’s something we were already doing at the start of 2020 through enhanced criteria on our Heritage range, and then further enhanced through the launch of our Freedom 40 product, which offers customers the ability to repay up to 40% of the initial balance without incurring early repayment charges. It means customers have the peace of mind that they’ve the freedom to manage the capital and interest on their plans should they suddenly be in a position to make levels of repayments, and ongoing product development remains a key pillar of our strategy for 2021.
FR: While a lot of discourse has focused on ensuring plans have remained fit for the needs of new customers during the pandemic, is there a need to ensure post-completion service has similarly kept up with demand as customers potentially explore plan features?
Absolutely, and with recent figures from the Equity Release Council indicating a rise in the proportion of lifetime mortgages being drawdown plans as opposed to lump sum variants that trend is only going to continue. Given the events of 2020 it’s only natural that people are going to explore their plan features – be it further advances, mortgage porting etc – in order to meet their needs that have doubtless changed over the last 12 months.
It’s certainly been a trend that we’ve seen as a lender, which comes at a time when we’ve comprehensively grown out Customer Account Servicing team to around 35 members, ensuring that our customers have continued to receive first-class levels of care throughout their plan term whatever life has thrown at them. We’ve also launched new customer-facing literature explaining available plan features and the processes involved in accessing them, ensuring that our customer base are able to make informed decisions when it comes to account management.
FR: Where do you see the industry heading next year (and beyond)?
We don’t know where the future is going to take us, and the year is doubtless going to start with uncertainty on a number of fronts. However, I’d like to see the industry continue the period of innovation that it’s demonstrated throughout the past year amid the toughest of circumstances. It’s enabled us to create processes, technological enhancements and products that put both our adviser network and our end customers at their heart, and has created a culture that’ll help continue driving the market going forward.