An industry panel taking part in a later life lending debate at yesterday’s Financial Services Expo (FSE) Midlands, concluded that advisers who want to provide the full range of later life advice services may have to change their propositions if they want to make the most of the growing opportunities in the sector.
In a discussion about the provision of later life advice, Adam Carnall of Age Partnership said there was an increased tendency for later life advice to be delivered in silos with advisers choosing to be either later life lending or equity release or pension or long-term care specialists, rather than providing holistic advice.
Steve Cox of Hodge Lifetime said both regulation and market factors had pushed advisers down this route. He said: “Ironically, regulation has driven advisers into silos. The problem is that I’ve yet to meet an adviser who is a master of all those areas of later life advice. So, the advice model will need to evolve because it does make sense that you take all those later life advice needs into account.”
He added: “The advice model will need to change to more partnerships with specialists or through having more experts in these areas working within firms.”
The panel also discussed the specific opportunity that exists for advisers in the equity release market, which is likely to lend more than £3 billion in 2017 according to the latest figures from the Equity Release Council.
Jason Ruse of Key Partnerships said: “Advisers don’t often realise the potential that exists with equity release advice. There’s a big opportunity and I don’t think advisers are as tuned into it as they could be – for instance, equity release products have changed a lot in the past five years and advisers who provided equity release advice a few years ago will have remortgage opportunities today.”
Cox said that the FCA is taking a considerable interest in the provision of later life advice. He said: “The regulator is taking [later life advice provision] seriously. There is lots of talk about sign-posting consumers to advice. A lot of Google searches are made by people looking for ‘mortgages for the over 50s’ and ‘mortgages for later life’ – the problem is they don’t point anywhere in terms of advice provision. We should be asking the FCA what it is doing to signpost where consumers go for advice.”
The panel also agreed the issue of customers coming to the end of their interest-only mortgage deals presented a considerable opportunity for advisers. Robert Sinclair of AMI (pictured) argued that advice should be compulsory in some areas. He said: “We think advice should be compulsory for those who are going to use the sale of their property as a repayment strategy. We don’t need regulation for this; lenders could simply demand it.”
Cox also argued that a number of networks might need to reconsider the later life sector in light of the increase in demand for such advice. “Some networks view older customers/borrowers as very very risky, when they’re not. They need to reconsider their perceptions of these customers.”
