With the continued progress of equity release comes a need for more advisers to undertake the training and become specialised in the market. However, at present there is a real shortage of mortgage advisers qualified to advise on equity release products; only one in three mortgage advisers currently hold the qualifications, according to a Mortgage Solutions October 2014 poll. Furthermore, only 6% of advisers surveyed in the poll said that they were in the process of gaining the relevant equity release qualifications.
However, the lack of equity release advisers will, I believe, be enthusiastically filled due to increasing customer enquiries, the arrival of major high street lenders, and a continued rise in lending that will push equity release away from the fringe and into the mainstream.
The rumblings and rumours that three major high street lenders will enter the equity release sector within the next 18 months, has been a symptom of the growing confidence in our market. Big names like Santander and Legal & General will not only increase confidence throughout our customer base.
The confidence major lenders brings has been a factor in our advisers at Bower Retirement Services believing that total lending of £2.4bn per annum is achievable. To surpass £2bn in total lending would be another record breaking year and those advisers currently not holding the equity release qualifications will find it much harder to overlook.
Furthermore, next year will be an eventful year for the equity release market, pensions industry, and all retirement planning companies as we are approaching a seismic shift in the form of April’s Budget reforms. There is a firm belief within the industry that the reforms will have a significant and positive impact and this will in turn attract yet more advisers.
Our own research at Bower Retirement Services corroborates this view as 70% of our advisers believe the equity release market will grow in the next six months, this is comparable with other industry research (Stonehaven found that 74% of advisers expect growth post-April).
The Chancellor’s decision to effectively end the current need for pensioners to purchase an annuity has also meant that retirement planning will become a much more flexible process, bringing equity release into a more prominent position. With the average pension pot sitting around the £30,000 mark, it seems likely that most pensioners will need to find a new way of funding their later years.
Equity release is in a perfect position to act as a remedy to this financial pain as most people’s largest asset is their home, it therefore makes sense for these people feeling financial strain in retirement to consider tapping into this asset.
With equity release steadily becoming a major player in retirement planning, advisers should, and will, view it as a more serious option. However, one thing we must continue to be wary of is the possible dilution of sound advice from a growing adviser base.
The customer’s specific needs and requirements must remain the cornerstone of all equity release advisers conduct or the success of the past few years may be swiftly forgotten. In my opinion, equity release will become a major financial product in the next few years and we will see well known powerhouses toss their hats into the ring as they seek to jump on board an accelerating success story. The question for the advisers is, what are you waiting for?
