Of these we know that 350 are members of the Equity Release Council; arguably they are the genuine specialists accounting for the majority of business, with the 1,650 others most likely writing the tail end.
However the sales breakdown, each one is critical to the customer and our industry, so we much applaud all those advisers. No-one seems to know who the 5,000 non-practising advisers are but my guess is mortgage brokers will make up the rump. For certain there will be IFAs that have taken the exam just to top up their credits, with many viewing it as a soft option.
My own financial adviser took the exam as it was the only qualification left for him to gain Fellowship status of the Personal Finance Society. In spite of him being an exceedingly able and clever chap, he chooses to refer equity release cases my way because he views it as a specialist field in its own right. That he chooses to refer rather than advise (on equity release) does not matter.
He understands when it may be right for a client so doesn’t miss the opportunity and that’s the important point. Attaining the qualification evidently hasn’t meant more numbers practising, so what can the industry do to encourage advisers to get involved in equity release? And if that’s what is really necessary – could getting too many advisers on board dilute the quality of advice?
I have my own theory as to why the numbers engaged are so small; quite simply equity release falls between two stools with mortgage brokers viewing it as a retirement product and IFAs as a mortgage of sorts. Sure mortgage brokers can readily grasp the product and certainly find it a useful tool for older clients struggling to obtain normal mortgages, or with an interest-only mortgage to be repaid.
But they aren’t that used to working with clients beyond their retired years so they opt to stick to the knitting. Nothing wrong with that of course, as mortgage brokers are indeed true specialists in their own right, but they are missing out on good business if they don’t at least refer clients to a specialist.
IFAs who tend to enjoy the closest and longest-lasting of client relationships, hence understand their needs better than anyone, have no excuse for failing to include equity release in their retirement planning discussions.
It remains a matter of personal choice for the adviser whether they refer or write business themselves, but unless they gain an appreciation of how and where to recommend equity release, they won’t know how to get involved.
Simon Chalk is equity release technical manager at Age Partnership
