'Enhanced advice' – refer, but don’t defer – Davidson

Among the proposals were hints at a new approach: ‘enhanced advice’, particularly in areas where we come across potentially vulnerable clients such as later life lending and debt consolidation.

As someone who’s spent years advocating for holistic advice in mortgage broking, I see this as a welcome shift. It’s not necessarily about reinventing advice, it’s about recognising that some scenarios are more complex, more emotionally charged and more financially consequential than others. As advisers, we need to treat each case on its own merits.

While the FCA hasn’t fully defined ‘enhanced advice’ yet, the direction is clear. It would mean going beyond basic product suitability to offer more rounded, contextualised advice, especially in cases where clients face competing needs, long-term implications or are vulnerable due to age, bereavement or financial strain.

This aligns closely with the themes I’ve written about over the past few years in this publication and elsewhere, namely the need to offer holistic mortgage advice that encompasses not just the mortgage product, but the life the client is trying to build around it. Whether helping older clients release equity, supporting someone consolidating debt or advising those with changing family structures, the goal is the same: to provide advice that puts the person and not the product at the centre.

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Taking advice through to later life

The discussion paper rightly points out that the need for advice in later life lending is growing. Around £2.6trn of UK housing wealth is held by people over 65, and yet, we still see many mainstream advisers uncomfortable or underqualified when it comes to talking about lifetime mortgages, retirement interest-only (RIO) products, or hybrid structures.

One line in the paper stood out to me: “Our previous supervisory work has found weaknesses in the quality of advice given by lifetime mortgage advisers. This advice tends to focus on the initial area of inquiry (e.g., mortgages) rather than considering the customer’s broader financial options.”

This is exactly where enhanced advice should come in. Later life lending is never just about a mortgage. It can be about pensions, care needs, inheritance goals, health, non-funded options such as charities and local authority grants and often emotionally charged family dynamics. These clients need more than a mortgage illustration (MI), they need someone who can guide them through complex, often uncomfortable decisions.

It’s completely understandable that mortgage advisers might not feel confident advising on equity release or even be unsure on what to say to older clients looking to remortgage. I appreciate the hesitation, it’s a very specialised area but I would suggest the solution isn’t silence – it’s referral to a trusted source who considers all the options.

If you’re a broker who doesn’t specialise in later life or debt-related advice, now’s the time to forge relationships with those who do. You don’t have to be an expert in every niche, but you do need to know someone who is.

Where the mortgage industry is heading

The FCA’s encouragement of enhanced advice isn’t just about consumer protection, it’s also a signal about the direction of our industry. As mortgage terms stretch, borrower ages rise and clients face more complex financial lives, then advice models need to keep pace.

Advisers who upskill, or who build partnerships with specialists, will not only serve clients better, but also protect their own businesses. Consumer Duty expects good outcomes, failing to refer when out of depth could be a breach. Doing the right thing is now firmly aligned with doing the compliant thing, it’s about leading with integrity and purpose. It’s about recognising that behind every later life loan or debt consolidation is a human being trying to make their life work better, often in difficult circumstances.

The mortgage industry has long prided itself on being client-centric. If enhanced advice becomes part of our framework, it shouldn’t be seen as a burden. It’s an opportunity to do our jobs better, deepen trust and demonstrate that we’re not just salespeople.

We are advisers in the truest sense of the word.