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Later life lending approach needs to move with the times

  • 02/11/2017
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Later life lending approach needs to move with the times
The advice industry’s approach to later life lending will have to change if the sector is to realise the opportunities in the market.

That’s according to a panel of industry experts at today’s Financial Services Expo (FSE) Midlands in Coventry.

In a debate on later life lending, Age Partnership head of partnerships Adam Carnall said later life advice is increasingly being delivered in silos. Advisers are choosing to be either later life lending or equity release or pension or long-term care specialists, rather than providing advice across all options.

Steve Cox, business development director for Hodge Lifetime, said both regulation and market factors had pushed advisers down this route.

“Ironically, regulation has driven advisers into silos. The problem is that I’ve yet to meet an adviser who is a master of all those areas of later life advice. So, the advice model will need to evolve because it does make sense that you take all those later life advice needs into account.”

He added: “The advice model will need to change to more partnerships with specialists or through having more experts in these areas working within firms.”

The market growth spike


The equity release market is likely to lend more than £3bn in 2017 according to the latest figures from the Equity Release Council.

Jason Ruse, head of Key Partnerships, said advisers are failing to grasp the sector’s huge potential.

“There’s a big opportunity and I don’t think advisers are as tuned into it as they could be – for instance, equity release products have changed a lot in the past five years and advisers who provided equity release advice a few years ago will have re-mortgage opportunities today,” he said.

This will have to change, as Cox said the FCA is taking a considerable interest in the provision of later life advice and there is significant demand.

“A lot of Google searches are made by people looking for ‘mortgages for the over 50s’ and ‘mortgages for later life’ – the problem is they don’t point anywhere in terms of advice provision. We should be asking the FCA what it is doing to signpost where consumers go for advice.”

He added: “Some networks view older customers/borrowers as very very risky, when they’re not. They need to reconsider their perceptions of these customers.”

Customers coming to the end of their interest-only mortgage deals also present a considerable opportunity for advisers. AMI chief executive Robert Sinclair argued that advice should be compulsory in some areas.

“We think advice should be compulsory for those who are going to use the sale of their property as a repayment strategy. We don’t need regulation for this; lenders could simply demand it.”

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