The value of equity released from referrals by introducers, who include professionals such independent financial advisers, grew on average by 12 per cent year-on-year to £85,100.
Meanwhile estate agent referrals saw a 33 per cent decline to £51,406. Key said this was likely to be due to the six-week closure of the property market.
Referrals from general intermediaries saw the average amount of equity released increase by 18 per cent to £106,341, while wealth managers referred an average of £154,096 per client, a 10 per cent rise.
Overall, mortgage brokers also referred the most business to the equity release sector last year, accounting for 56 per cent of referrals. This was a small change on the 55 per cent share they held in 2019.
Key’s ‘Introducing the Introducers’ report, which analyses sources of equity release referrals, found the pandemic drove a quarter of clients to use the funds to clear an outstanding mortgage in the third quarter of the year.
Introducers in general are under the impression that just eight per cent of their clients want to hear about equity release but despite this, 39 per cent said they routinely mentioned it in appointments. This was an improvement on the 32 per cent who did so in 2019.
However, they are finding it harder to determine if equity release is suitable for a client as just 37 per cent said they were able to identify if it would meet their needs or aspirations, down from 42 per cent the year before.
Key suggested this could be because of changing advice patterns during the pandemic but said more still needed to be done to educate the wider market of the benefits.
Some 15 per cent of all introducers said they made no attempt to work out whether clients would be interested in equity release and of those, over half said they had other priorities or services they wanted to offer. Meanwhile a fifth said they did not know how to correctly identify clients who may be suitable.
Just less than half of all introducers said they had a mix of positive and negative responses when they brought up equity release with their clients and 42 per cent said it had been received positively.
Of those who made positive comments when the subject of equity release was raised, 14 per cent wanted to know more about it.
Just one per cent of respondents said clients reacted negatively to the prospect of equity release.
The pandemic has had a notable impact on the overall confidence of introducers, as 58 per cent expect equity release referrals to grow over the next three to five years compared to 68 per cent who said the same in 2019.
A third of the 500 introducers surveyed felt they would maintain current levels and nine per cent believed business would shrink.
Wealth managers were the most confident about the effect of the pandemic on their business with 70 per cent saying they expected business to pick up while mortgage brokers were the most wary, with 30 per cent saying the market would get harder for them this year.
Overall, 44 per cent of introducers expect business to improve in 2021 while 23 per cent feel the pandemic will have a negative effect.
Jason Ruse, business development director at Key Partnerships said: “With introducers predicting big things for the equity release market over the next three to five years, the potential for the sector is very clear.
“That said, it is important for organisations to make the right choice around what advice they wish to provide and what advice they feel might be better provided by a firm that specialises in the market.
“Fundamentally, it is about finding the right fit for your business and your clients. The importance of specialist advice cannot be overlooked, and we welcome more referral partners into the market,” he added.