I can only put the reaction of those who have expressed dismay at the decision, down to their inability to throw large numbers of advisers into the sector at the expense of quality consumer outcomes.
For what it’s worth, I’d always seen the proposal as pure lunacy, and part of me continues to worry that the regulator has not put the kibosh on it once and for all, by suggesting it will not “change the appropriate qualification for equity release at this time”.
Those three words “at this time” suggest that the final nail has not been put in this idea’s coffin and instead the lid has been left off potentially allowing this zombie idea to crawl out at a later date.
For those bemoaning this decision, and suggesting it will ultimately impact on consumers because the sector does not have enough advisers to service growing demand, may I be the first to say that is total poppycock.
What has happened is (at least for the time being) a victory for common sense. All those who gave the view that mortgage advice skills are an absolutely crucial part of providing equity release advice are right to be satisfied at this moment.
Anyone with any understanding of how the later life market is changing, particularly in the areas of later life lending and equity release, will understand that we should be ensuring advisers have a better understanding of more related areas, rather than fewer.
Later lending growth
Given the growth in later life lending and specific products aimed at the over 50s, for example, there is a true need for advisers to (at the very least) be looking at both mortgage and equity release options.
Take one away – notably the mortgage – and you run the risk of consumers being sold equity release products when there might well be later life lending options far more suitable to their needs.
Demand for equity release might be growing, but there is also a growth in the options available for those who need to refinance or release equity, and increasingly this might well be through a mainstream mortgage, albeit one designed for those reaching, or in, retirement.
As mentioned, in the later life advice space we should be moving away from siloing off product areas.
Instead we should focus on holistic later life training and qualifications that cover as many product areas as possible and allow the adviser to provide a 360-degree view of a client’s entire later life advice options. Not doing so, as would have happened here, just provides advisers with a get-out clause allowing them to sell equity release and nothing else.
I am happy that this potential measure has been abandoned but the fact that it could still be re-engineered does rankle; it would be a completely retrograde step for both the adviser community and, more importantly, the clients they advise.
We should be – as the LLA is – supporting advisers to broaden their training and qualifications across multiple later life areas, rather than narrowing their vision.