Indeed, £3.06bn worth of equity was released by homeowners last year, with corresponding amounts for the first quarter this year proving to be the highest ever for a three-month period.
With more over-55’s looking to boost post-retirement income, experts are predicting market growth levels of 30-40% over 2018.
This means brokers will need to maintain high standards of information sharing and impartiality in relation to customer queries if they wish to capitalise on this unprecedented demand.
With that in mind therefore, let’s take a look at some of the most frequently asked questions and issues and consider how advisers should respond.
Many prospective clients are understandably nervous about committing themselves to fundamental and life changing financial decisions such as equity release and will no doubt want to feel that they are in safe and trustworthy hands, and that’s where brokers come in.
Assuming that the practice is a member of the Equity Release Council, brokers will be able to assure customers of the strict ERC codes of conduct that are followed as well as reminding customers that all equity release schemes are regulated by the Financial Conduct Authority and that advisers are similarly bound by their enforceable standards of information and advice.
For example, most people will want to ascertain definitively whether equity release is a suitable option before proceeding.
Brokers will need to examine all relevant options, requirements and circumstances (such as assets or possible health problems) before recommending a particular course of action (even if it means discounting the possibility of equity release itself).
Pros and cons
Customers will also want to know which plan will offer the most appropriate choice to accommodate their needs, so brokers will need to outline the relative pros and cons of all available schemes and to present supporting evidence to facilitate this decision.
Questions relating to costs are obviously the most pertinent consideration for most people, so brokers will field queries regarding application and valuation fees, as well as explaining principles surrounding compound interest, current rates, borrowing limits, early repayment charges and the impact of ER on children’s inheritance.
Most customers are not financial experts, at a time when they are considering making a huge decision about their financial circumstance a broker’s input is invaluable.