So how do advisers – and especially those new to the market – begin to understand the differences between all the later life products out there and come up with the one that best suits the client’s needs?
That was a key question discussed at a recent roundtable, following the publication of BestAdvice’s report.
Tandi Fellows, mortgage & protection adviser at Probity Mortgage Services, who has entered the later life space in the past 12 months, sums up the situation facing new entrants: “How are you able to advise the clients on what’s best for them, if you yourself don’t understand the products that you are advising on, let alone how to source the products?”
BestAdvice’s report found that 78% of advisers use the services of a mortgage club in order to access later life products and this is a route favoured by the advisers taking part in the roundtable.
“Air Sourcing has been a lifeline for me,” says Fellows. “It was also one of the main reasons I moved to [network] HL Partnership because I was in a DA practise and my practise principal at the time wanted me to do equity release but there was no support for me, I didn’t know where to start. I really felt I was being hung out to dry.
“The support I’ve had from my network has been phenomenal. I’ve done my professional status qualification and all of the webinars with Air Sourcing. They have been amazing in helping me with my sourcing. And then obviously I’ve got the backup of the later life lending compliance team at HL Partnership; they check all my cases before I even do the application.”
The most experienced later life adviser panellist, Darren Amos from Anstee & Co, has predominantly used what was formally known as the Equity Release Club until it became part of the Later life Academy and Air Sourcing.
“I’ve used them from day one. The support a club that can give, particularly to a newer adviser, is so vital. When I started when there were only 50-60 different options available; now we have hundreds of options. It must be very hard for a new adviser, not being sure exactly which product range to even start thinking about, let alone anything else.
“At one point, if I was looking for the maximum LTV, I would know without even thinking which company I would go to. Now that’s changed, because they’ve all altered the way they calculate things and there are different product ranges from within the same provider. So, support is invaluable.
“I subscribe to the Later Life Academy not because I really need to – I’m not looking to generate leads or anything else. I just like to know that there are people there who I can quickly contact, sometimes just to reconfirm what I think or already knew.
“As a company, we subscribe to SimplyBiz and they have a mortgage club. But I don’t go with that one because it’s not specialised. I tend to favour the ones that specialise in certain areas and reciprocate by making sure I use the club that has helped me out at some point when I had a problem. It makes no difference to me, giving the club an extra £30-£40, but it keeps them going and supports them.”
Fellows says that advisers often have to negotiate further requirements from their network.
“I didn’t realise when I came on board with HL Partnership, that while you have to be signed off as competent as a mortgage adviser before you are able to do equity release, during the transition you go back to being classed as not yet signed off, not competent, until you’ve submitted six cases,” she notes.
“I had a case that was in the process and the support that I had from HLP was second to none because these clients were vulnerable because of a bereavement, they had lost their only son. They needed the equity release. Compliance checked through before signing it off and I then went ahead.
“HL Partnership has an authorisation course. You have to do a business plan for equity release. They don’t want dabblers, so you have to do a minimum of six cases a year to remain compliant and conduct equity release with them. They have been absolutely brilliant in terms of supporting me as a new adviser right the way through the process.”
Financial adviser David Phillips is new to the later life space but currently uses the Legal & General Mortgage Club for mainstream mortgages and is investigating what exposure it will provide his firm to the later life/equity release space.
“We’re doing the qualifications at the present moment and then we need to get the experience around how we source and how we actually find the right product. So I think any support that is available, such as the Equity Release Council’s idea for mentoring, is going to be extremely important to us.”
The question of whether to deal with a specialist provider for later life is one that advisers also face when looking at sourcing systems. A number of the mainstream systems include equity release and/or Retirement Interest Only (RIO) mortgages, but advisers also have dedicated later life sourcing systems available in the market.
“Back in the day when I first started doing this, pretty much the only place you could source equity release mortgages in one place was with Iress,” recalls Amos.
“However, I haven’t used that for a long time because it doesn’t give anything like the information we require – I’ve used specialist sourcing systems which have got better and better.
“Personally, Air Sourcing is my preference, but Advice Wise is very good as well – Pure Retirement has promoted it heavily, it’s a really good, solid system. They give very detailed analysis and it is very easy to source things by whichever criteria you think is important. So it’s not just who’s got the lowest rate, it’s also by what the overall cost is going to be – they give you all the various options.
“Unfortunately, you can’t just use one because very few of them cater for the whole market, particularly on the RIO side. I’ve encouraged RIO providers to contact the various sourcing systems to get themselves added on to the list so it is a lot easier for me having a source for them. We happen to use Mortgage Brain rather than Trigold for our mortgage sourcing but it’s not the best thing to source a RIO on either.
“To be fair, as the lifetime mortgage market is massive compared to the number of lenders during RIOs. Normally I will then speak to a provider before I go any further, just to make sure the client does fully meet the criteria, if there’s something I’m not quite sure. The best part is they also allow you to go back in and make lots of tweaks and still retain the original data you’ve sourced with.”
Chris Flowers, head of intermediary sales at Pure Retirement, wants dedicated later life sourcing systems to continue to evolve and provide advisers with more tools to successfully source, place and manage cases.
“Pure has promoted Advise Wise pretty heavily. We’ve seen it moving away from just being a sourcing tool and more towards being a technological solution for all advisers. That’s really where we want to get to. It’s not right that you source and then have to go off elsewhere to be able to be able to put everything together,
“It will take some time but hopefully sooner rather than later, you’ll be able to use it as a hub to get all your marketing support. You’ll then be able to source based on criteria and rate. It will they will help you put recommendations together and then you’ll be able to send a pack out directly from it. And then once you get the client’s go-ahead, you’ll then be able to submit the application and track it.
“I think that’s the ultimate goal of all sourcing tools and once you do that, the question is: what part does the club play? When I’ve discussed this with some advisers they are slightly nervous and worry it would take away their advice element. But I don’t think we are; what we’re trying to do is make the technology the best it can be to free up the adviser’s time to concentrate on the most important areas, such as speaking to clients, their families, and understanding all their needs. The more time we can get an adviser in that sweet spot speaking to the clients, and actually let the technology to help them with the rest of it, the better.
“I think that’s where we’ll see the technology and sourcing go in the next year to 18 months.”