Speaking to delegates at the Personal Finance Society (PFS) conference in Birmingham yesterday Rozario (pictured) described the equity release market as one of the most exciting areas of financial services.
“This market is evolving. We are part and parcel of retirement planning and we are going to be a bigger part of it. This is something you really need to consider, whether you want to get involved in it, and if you are advising clients then you don’t have a choice – you should be getting involved in this.”
Support for advisers is provided by the Equity Release Council and extra guidance is laid out in MCOB chapter 8.
“There is a lot of support in the equity release industry because we want to encourage advisers to move into this area,” said Rozario.
Pension reforms, in place from April next year, will allow pension holders to invest their savings in any vehicle they choose instead of being restricted to purchasing an annuity.
This change has given rise to concerns that some pension holders will fritter away their nest egg causing them to rely on the equity in their homes.
In an earlier speech, Paul Carter, managing director of provider Pure Retirement, said statistics revealed that more than 60% of the 50 plus consumers surveyed said they were going to use their properties as part of their retirement plan.
The expected surge in demand for equity release mortgages has caused some advisers to worry that the sector does not currently have the capacity to serve the needs of those customers.
Mortgage Solutions reported last week that brokers are worried about the potential advice gap which may emerge in the equity release sector.
Colin Payne, associate director at Chapelgate Private Finance, said: “Many mainstream brokers are able to deal with complex mortgage enquiries but many are not equipped to provide advice on equity release. The industry needs to work harder to incentivise brokers to obtain these qualifications.”
