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Realities and challenges of the later life lending market – Wilson

by: Stuart Wilson, corporate marketing director at More2life
  • 19/02/2021
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Realities and challenges of the later life lending market – Wilson
The coronavirus crisis forced the equity release market to embrace technology at speed and arguably in ways it has never done before.


Adopting a remote-only framework allowed the industry to remain open while lenders and service providers overcame the various difficulties posed by historic systems dealing with a modern pandemic.

However, challenges remain for later life lenders as the UK continues to navigate its way out of the crisis.


Adapting processes

Launching a remote valuation process last year we saw first-hand the work needed to adapt to the restrictions in place, while ensuring the advice journey continued to offer the same levels of care and guidance.

The crisis is incredibly fast-changing, meaning an agile approach is critical in ensuring we’re able to progress cases efficiently.

This means reallocating resources and implementing technology to make internal processes quicker and more accurate.

How long this approach will last very much depends on how the pandemic progresses but when we do return to normal, I hope we will take the lessons learnt and only return to former practices when they offer the best consumer outcomes.


Criteria changes

With the crisis impacting everyone to some degree, we’ve also had to look more closely at our lending criteria.

For example, if a home hasn’t been sold or purchased in the last fifty years, it is harder to gain the digital details needed for an accurate remote valuation to ensure that the homeowner receives a fair deal.

Physical valuations are now possible and lending criteria has largely returned to pre-Covid norms across the market, but when remote valuations were the only option the need to keep advisers informed at every stage was key.


Supporting advisers

The switch to remote advice has naturally also created challenges for later life advisers.

We found a dramatic uplift in the numbers offering remote advice for the first time: around one in four had started offering advice via the phone for the first time and 43 per cent launched video advice where they previously did not offer the option.

Many lenders have also since introduced education and resource centres for later life advisers, to help empower them to discuss later life lending remotely.


Customer vulnerability

The crisis also presents challenges relating to the wellbeing of customers.

With unemployment rising steadily and many people having experienced mental, physical and financial difficulty, vulnerability is a growing focus.

Equipping advisers with the tools and knowledge they need to successfully identify vulnerability is now firmly lodged at the top of later life lenders’ to do lists.

Our latest research uncovered that 81 per cent of later life advisers say they need more practical guidance on how to spot the signs and deal with vulnerable customers.

We therefore welcome the Financial Conduct Authority’s (FCA) next review into the issue, which is expected over the coming months and should be aimed at helping the industry overcome this challenge.

Although we have come a considerable way since the first national lockdown, the crisis continues to generate new challenges for equity release lenders.

Technological innovation helped us return to some form of normal but continued support for customers and advisers now presents its own challenge and remains a key focus for lenders.

That being said, the lessons learned from 2020 mean we are now in a much better position to adapt and overcome these difficulties.

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