A recent survey of intermediaries found that the overwhelming majority of advisers believe that equity release will be an area of considerable growth, with equity release products playing a crucial role in meeting the needs of the UK’s ageing population.
In fact, close to half of those surveyed believe that the shortfall in pension provision will be the main driver, followed closely by the need for those in or at retirement to pay off existing debts such as credit cards and mortgages.
With equity release set to become a mainstream financial product it is clear that many advisers and mortgage brokers are considering entering the equity release market.
An increase in the number of equity release advocates is no bad thing for the industry, However for those who want to add equity release to the portfolio of products they advise on there are five things you need to know.
1) Sort the paperwork
Firstly, to be able to advise on equity release you need to hold a Certificate in Regulated Equity Release (CeRER), however there is more to being a successful adviser than a piece of paper.
2) Make sure your website is picture perfect
With close to half of all equity release business generated through the internet, if you reject or neglect your website you do so at your peril.
The key things to remember when designing and updating your website is that online less is more; and people do judge a book by its cover.
Avoid using imagery that unwittingly alienates people, pictures of couples can appear intimidating, especially to clients who are widowed or divorced. Images of single people can look rather lonely and sad.
Clients tend to view themselves as younger than they are and have discovered that images of mixed age groups are the most warmly received.
3) Consider joining the Equity Release Council
One of the common barriers that advisers face when advising on equity release is clients’ misconceptions about the products.
However members of the industry trade body, the Equity Release Council, have to adhere to the SHIP standards which guarantee that clients will never owe more than their house is worth and allow clients to remain in their property for life.
By joining the Equity Release Council you can not only reassure your client about the safeguards included on these products, but of the high standards that you work to, further boosting your own credibility.
4) Don’t underestimate the customer journey
The concept of taking out equity release can be a difficult one for clients to get their head around. Having spent their working life paying off their initial mortgage, it may seem like a backward step to effectively take out another mortgage.
The idea of unlocking the cash in your home can be even harder for clients to entertain if they have children, as many still plan to leave their property to them. Although attitudes are shifting, many are reluctant to do anything that will erode their inheritance.
In these instances it is important to try to engage clients’ family from the outset so they are aware of the financial commitment their parents are undertaking.
5) Take your time
It is important to be understanding when your client says they want some breathing space in the process. It can take anything up to 2 years from the point at which someone thinks they might need to release equity to them actually doing so.
So be empathetic to that need and, most importantly, be ready to keep in contact with your clients who have expressed an interest and are not ready to proceed yet.
