When I meet with Andrea it’s not long after a string of heavily critical articles have been published in the national press questioning the credibility of equity release products.
Of course, Andrea is no stranger to this type of publicity, having been in the industry following the credit crunch when criticism of equity release was rife. However, she says comments today are reminiscent of how the industry was treated 10 years ago, and with little opportunity to speak back and defend the market.
“If anything it’s very damaging to those customers who could really benefit from equity release,” she says. “People will believe what they read and are being told, rather than thinking ‘I’ll find out for myself’.”
But it’s not all doom and gloom. Andrea has been working as chief corporate officer at Bower Retirement Services for the past 14 months now, which has grown to be a national advice company specialising in equity release, where she plays a key role in acting as an industry spokesperson.
Recruiting the best
The firm formed in 2006 with a specific focus on customer service and now employs 35 advisers around the country. In July, Bower’s Ian Howarth won Best Broker for Equity Release at the British Mortgage Awards.
Despite Andrea’s part in growing the business, she admits that there are still a number of barriers when it comes to recruiting the best advisers.
“Equity release is not seen as a sexy industry,” she says. “For one thing you’re dealing with the older generation so if you’re looking to recruit new blood into financial services and then get them to specialise in equity release, it’s a reasonably difficult task.”
She adds that this is further compounded by the fact that equity release products are often lumped into the same basket as mortgages, whereas the advice process requires a separate qualification and additional skill set.
“Equity release is more akin to financial planning than mortgages,” Andrea explains. “But because of the regulation and qualification requirements, it puts them in the silo of mortgages. On the face of it, until you can understand just how rewarding the job can be, advisers might think ‘I don’t like the sound of that’.”
Earlier this year, the Financial Conduct Authority (FCA) said it had found ‘problems at every stage’ in the way financial firms deal with vulnerable customers. The regulator’s definition of vulnerable customers included individuals with poor literacy skills, those who have caring responsibilities, people with disabilities, dementia or the elderly.
But Andrea disagrees that older customers should immediately be classed as vulnerable.
“Vulnerability doesn’t necessarily go hand in hand with older age,” she says. “It’s all about having a really good understanding about the older generation but at the same time not piling them all in to one homogenous group. Obviously there’s a huge difference between a 55-year-old and an 85-year-old, so services and products need to be staggered to meet those varying needs.”
During her time at SHIP, the trade body (which is now known as the Equity Release Council) published a discussion paper looking at how customer safeguards could be broadened over a wider range of products, in turn helping the market grow and diversify. Andrea believes that the time has come for such changes to be made.
“We [SHIP] came to the conclusion that the best way to facilitate growth in this market was to have a tiered approach to safeguards,” she explains.
“There could be a variety of safeguards, almost like a traffic light system. This tiered approach would open up the market massively but it would still extend certain criteria, safeguards and codes of conduct.”
Since the credit crunch, the equity release sector has been starved of innovation and competition into the market. Indeed, in September the FCA’s director of strategy and competition spoke out about the lack of competition, saying a debate was needed to explore the viability of expanding the market and its product choice.
But with the arrival of industry giants such as Legal & General making a splash with its entry into equity release in February, Andrea believes that more firms will be tempted to dip their toes in the water.
“In the past the market has been too small for bigger companies to get involved as it’s not been worth their while, it’s almost like a self-perpetuating legacy. But the attitude is changing, we’re seeing that confidence now.”
Andrea Rozario – a brief biography and quick-fire question round
Proudest career moment?
Winning the Outstanding Contribution Award at the 2013 Equity Release Awards.
Biggest challenge ahead?
Personally, getting through the last leg of my Psychology Masters.
If you were Prime Minister for the day, what would be your first policy change?
I would like to see a policy introduced that would help to end or at least reduce loneliness in old age. If awareness was increased and local initiatives incentivised with central government backing combined with local community support, we could end a lot of misery in older age and even get younger members of society more involved. This should not be just down to the sterling work of some charities.
What’s the best present you’ve ever given?
This is a difficult one because I’m not sure the recipients will think it’s the best, but I would say a piece of handmade jewellery to friends. It’s a hobby of mine and I get so involved with each piece that it’s like parting with a little bit of me.