Specifically, when it comes to equity release advice, we might well argue that when it comes to providing clients with a product solution, there has historically been a ‘one and done’ attitude.
By this I mean that remortgage or rebroking activity with equity release clients has not always been a ‘natural’ part of our advice path.
There are a number of reasons for this, not least the fact that, back in the day, alternative product options were not in an abundant supply and therefore, securing a significantly beneficial new product for an existing client was not an easy task.
It wasn’t like the mainstream mortgage market where remortgaging is a baked in part of the advice process, where short-term deals are prevalent, where competition is strong, and where there are clear monetary benefits to regularly swapping into other products when those special rates end.
However, while the equity release market is clearly not at the same level as the mainstream market – we still have a much smaller number of providers active and products available – we have clearly moved into an environment where remortgage and rebroking should be an intrinsic part of the process.
Change in circumstances
This is particularly a consideration when you acknowledge that some equity release clients might be taking out their first product at a relatively young age – from 55 years old – and they could be equity release customers over a long period of time.
During that period, circumstances are likely to change, and therefore it seems right and proper that equity release advisers are looking at client reviews on a much more regular basis, especially as competition and product choice within the sector grows and grows.
Perhaps we have as industry have neglected to talk up the remortgage and rebroking opportunity as it has become more viable?
Certainly, it would seem the Equity Release Council believes more could be done in this area.
It is going to issue guidance to both lenders and advisers next year on equity release remortgaging and how best to communicate what can be done, particularly for those customers whose circumstances do change.
For mainstream mortgage advisers, keeping in contact with their existing clients will be something of a no-brainer, and it may be somewhat difficult for them to get their heads around the fact some equity release advisers may not do this as a matter of course.
However, I would suggest the number not in regular contact is dwindling, and any adviser worth their salt, who recognises that clients are no longer ‘one and done’, will be able to quite clearly see the benefits for both them and the client in regular reviews, and keeping in constant communication in order that they can respond quickly to changing needs or circumstances.
Again, I would say we can learn a lot from the mainstream space here, and as we move towards a much more holistic ‘later life lending’ approach which covers mainstream mortgage options for older borrowers. We need to ensure we have this mentality around future product options and how they might be more relevant, and more beneficial, to the customer than what they currently have.
Considering the festive period that has just passed, we might justifiably say that an equity release customer isn’t just for Christmas, they should be the adviser’s responsibility for the rest of their life.
Hopefully, this will become ingrained in the advice process and we don’t have any ‘orphan’ equity release clients who could be far better off away from that original deal.