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Networks have ‘slightly bizarre’ compliance worries about equity release – Wilson

by: Stuart Wilson, managing partner of Later Life Academy
  • 01/02/2019
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Networks have ‘slightly bizarre’ compliance worries about equity release – Wilson
I would be surprised if most mortgage market stakeholders do not believe later life lending is going to be one of the growth advice areas for intermediaries over the next 12 months and beyond.


Demand for later life lending can only go one way but we have some issues to overcome, not least the segmented nature of later life lending advice.

This includes the disconnect between equity release, retirement interest-only (RIO) and mainstream mortgages suitable for older people.

Then there is the ability of those customers to find the right advice and get the right product.

And can advisers make their mark in this sector and secure the support they need to succeed.

The last point is obviously important, especially when we still work within an environment where, for example, some networks are still not comfortable with their advisers conducting equity release business.

This tends to be due to compliance department unease about advisers being active in this part of the market and perhaps a regulatory headache or potential complaints which it simply does not want to deal with.

This is short-sighted, especially when you consider the growth potential of the later life lending sector.


Bizarre compliance worries

The compliance worries equity release especially creates for networks seem slightly bizarre. Somewhat ironically, there is an acceptance that their member firms can work within the mainstream field – which includes RIOs and mortgages which come with a higher maximum age level – but equity release is out of bounds.

Even though, as we all know, to truly be able to ensure later life clients are recommended the right product for their circumstances, equity release has to be part of the advice process.

In a way there is a bigger chance of complaints coming further down the line from a decision which stops appointed representative (AR) advisers and firms being active in the equity release market.

By doing so you are completely neglecting a relevant and potentially suitable product choice for these customers.

What will they do in the future should they feel they came out of the advice process with completely the wrong product?


Principals with foresight required

There is no shortage of support to help advisers and firms make the full transition into later life advice.

We are working with networks to build bespoke training, support, and technology in this area and providing it for the whole array of products and services later life clients need – not just equity release and other lending.

To that end, the opportunity becomes even greater, but it will need principals with foresight to help their firms into such areas.

At the moment, for some, the door is locked.

By the time it is opened by them, those who have stolen a march will have established services and brands, while others will be picking over the scraps.

This is not a demand that will fall anytime soon – all firms, regardless of their regulatory status, should be given the opportunity to make their mark.


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