Air Mortgage Club has revealed the results of its first ‘Later Life Lending Census’ of advisers either currently active, or wanting to operate, in the later life market.
The Census – of over 400 advisers – sought to gather the views of a wide range of stakeholders to understand what changes needed to be made to make the later life lending market more accessible for both advisers and consumers alike.
The later life services platforms said the clear message from the industry is that, in order to break down the barriers that exist around the provision of later life lending advice and products, there is a real appetite to rebrand, re-educate and re-engage. The first step is the need to ‘rebrand’ moving from seeing the market as being focused on a simple single equity release product choice to a more holistic later life lending approach.
Overall, 80% of respondents agreed that it would be in the best interests of all stakeholders to move the discussion away from just equity release to a broader later life lending strategy. While over half (59%) feel the market has, or is already, doing this, 41% of census respondents still believe the market remains mainly focused on equity release.
Air Mortgage Club believes there is clearly a need to move more quickly in this direction, given the much broader range of product solutions available beyond equity release such as retirement interest only (RIO) products or standard residential mortgages with a higher maximum borrower age.
Specialists in the sector were more likely to use the term ‘later life’ when discussing the options available to clients, compared to the wider adviser community – 59% versus 37% – with Air suggesting this is because they are able to provide advice on the entire range of options.
As a whole, 41% of respondents are only using the term ‘equity release’ when discussing borrowing at older ages with clients. 5% talk of ‘retirement mortgages’ while those using more holistic terms are talking of ‘later life lending’ (26%), ‘later life mortgages’ (15%); and ‘later life borrowing’ (6%).
Air Mortgage Club argues that, given the varied needs of individuals and the greater array of lending options available to them, an approach which only focuses on equity release is not sufficient and advisers should be able to offer all later life product solutions in a more holistic framework.
It argues that as a first step, focusing on ‘later life lending’ or ‘later life borrowing’ will help advisers and customers find the right option from the full array of options available for their individual circumstances.
Stuart Wilson, CEO at Air Group which includes Air Mortgage Club, said: “This first Air Mortgage Club Later Life Lending Census was designed to secure the views of a wide range of advisers either active in, or wanting to be active in, the later life lending market. We wanted to understand what barriers there might be to adviser (and consumer) engagement, and to come up with a framework of action that could be taken to help remove these and to help develop the market further.
“To that end, the results we received highlighted three key areas where change might be required and, by focusing on a number of key ‘wins’, we could help ensure the market continues to grow and fulfill its potential. One of the clear messages was around the need for a rebrand. While many in the industry are talking about ‘later life lending’ or ‘borrowing’ in a holistic sense, there is still a significant focus on equity release being the single product solution available.
“Clearly that’s not the case, and in recent times especially, those moving into, or already in, retirement have many more options available to them. However, the siloed nature of the sector means not all advisers are able to advise on all options, which again creates issues in terms of the outcomes that consumers get.
“We believe there is a clear need to look at ‘later life lending’ as a whole, not just equity release, and having this broader strategy will open up the market further and should help engage both advisers and consumers in the wider range of options that could be suitable to them.
“It may also help the regulator come up with a regulatory solution which is more ‘later life lending’ focused as well because at present, consumers may be getting solutions based on what the adviser can’t advise on, rather than what they can.
“Advisers were also keen that we focused on re-educating consumers and the wider industry to the later life lending options available and re-engaging with stakeholders to support the growth of the market. Over the coming weeks, we will outline the key findings around these important ideas and delve into the research further.”
