Nothing beats the experience of life so they say, but how many advisers reading this might believe it, or indeed see it within their existing client base.
We might be led to believe that, when it comes to the financial decisions we make, being a little bit longer in the tooth means we are more aware, more engaged, more knowledgeable about what is on offer and what is appropriate for us.
However, the market moves incredibly quickly and, what might have seemed the norm just a couple of years ago, is no longer the case. Older customers might be set in their ways and unaware of the vastly improved product offering available to them. That’s certainly the case in the later life lending space and, undoubtedly so, when it comes to equity release options.
No need for advice?
Which is why I was not surprised to see research recently which suggested that a whopping 94 per cent of borrowers over 55 years old haven’t switched their mortgage in the last five years. Furthermore, this demographic is also far less likely to have used the services of an adviser when it came to sorting out their last mortgage.
So, much for utilising that experience. In fact, this experience argument is a double-edged sword especially when it comes to later life lending. borrowers feel that perhaps having gone through the process a number of times, they have no need for advice and indeed, know best themselves.
But, that’s clearly not the case. How much are this group of borrowers overpaying on their current deals if they haven’t remortgaged in the last five years?
How much could they save by switching now and what are their plans for the future? Considerations such as taking debt into retirement and for how long and how their existing mortgage ties up with their plans for the future can all be discussed by talking to an adviser, and yet currently, it would appear that large numbers of later life clients are simply not taking that opportunity.
‘Large pool’ to fish in
In the later life sector, we often talk about signposting clients towards later life advice and the assumption is often that this is for potential equity release borrowers only. But, the truth is that this signposting is required right across the board.
From the 55-year old with just a few years left on their mortgage, to the pensioner who might wish to help a child onto the housing ladder, to those whose mortgage will run for the foreseeable future, to the borrower who needs long-term care funding.
Advice is absolutely vital for all, and yet there are great swathes of the population who are clearly either not aware of the benefits, or perhaps don’t know where to start. There is a large pool for advisers to fish in here, but it will require a marketing and education push from the entire industry in order to secure this business.
If you are an adviser yet to see the potential in the later life market, then this is clearly it – we have an ageing population in the UK, and when people get to that age, they are less likely to seek advice. If that isn’t a call to arms for the advisory profession, then I don’t know what is.