Will Hale (pictured), CEO of Key, said this in response to the Financial Conduct Authority’s (FCA’s) chief executive Nikhil Rathi suggesting that treating pensions, mortgages, savings and housing wealth as separate financial journeys should be reconsidered.
Speaking at the JPMorgan Pensions and Savings Symposium, Rathi mentioned the possibility of allowing people to use pension savings in mortgage affordability assessments.
Rathi said: “If we continue to treat pensions, mortgages, and savings as separate tracks, we will miss opportunities to help consumers get where they need to be.”
The regulator is currently consulting on the pensions and investments markets as part of its Advice Guidance Boundary Review, with the aim of closing the advice gap and improving support for consumers.
Hale said the review’s proposed Target Support model for pensions to fill the gap between generic advice and regulated advice did not include later life lending or property.
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Hale said Rathi rightly observed that many people’s biggest asset was their home, and pointed to him suggesting that the right product design and consumer protections in later life lending could benefit more people as part of a financial plan and not a last resort.
He added: “The speech recognises that how and when people access their housing wealth is increasingly important. It’s welcome rhetoric and all the points mirror those that the later life lending sector has been making for some time. But more pragmatic action is required to remove advice silos, to grow people’s awareness of the options available to them and to reduce the costs involved in acquiring and serving customers so outcomes can be improved.
“Older homeowners have significant wealth tied up in their homes, which could be put to work addressing a wide range of financial issues, including improving their standard of living in retirement as well as helping younger generations onto the housing ladder. This would also align well with the government’s growth objectives.”
Advisers must work in collaboration
Hale said while the sector waited for the regulator and policymakers to improve “the ecosystem within which intermediaries and lenders operate”, those in the market should “take responsibility for addressing current challenges and seizing the opportunity here and now” .
He added: “It is important that mainstream mortgage advisers, generalist IFAs/wealth managers and later life specialists work in close collaboration so that older homeowners are made aware of all their options and achieve consistently good outcomes.”
