Air Mortgage Club’s first ‘Later Life Lending Census’ comprised of advisers either currently active, or wanting to operate, in the later life market.
The census asked over 400 advisers on their views to find out what changes are needed to be made to make later life lending more accessible for both advisers and consumers alike.
Concerns about lack of knowledge
While 94 per cent of respondents said the concept of ‘later life lending’ meets a genuine customer need, there was concern about the lack of knowledge around what it is. They found that 76 per cent of advisers said consumers had limited understanding of the market while 43 per cent said the same was true of advisers.
The census also revealed that with a lack of knowledge comes misconceptions about the product choices available. A high proportion, 71 per cent, believed consumers attached a negative image to equity release, while 68 per cent felt most consumers saw later life lending products as a “last resort”.
As a result, 56 per cent of advisers said the most challenging part of the process with clients was “customer reassurance and managing misconceptions”. This scored above “meeting regulatory and compliance requirements” at 54 per cent, “managing vulnerable customers” at 49 per cent, and “customer acquisition” at 43 per cent.
Flexibility and a competitive interest rate is key
While 77 per cent said a competitive interest rate was most valued, this was followed by the flexibility in how clients receive money at 76 per cent, the flexibility of repayments, 71 per cent, and the no negative equity guarantee which was 60 per cent.
Stuart Wilson (pictured) chief executive at Air Group, said: “Anyone who has worked within the equity release market will know that one of the biggest challenges has been around consumer education.
“Tackling misconceptions and misinformation has been a constant struggle – one which the Equity Release Council in particular has fought for many years.
“We need to re-educate ourselves and consumers to look at later life lending holistically and to continue to tackle the mindset of those who believe the products available are limited and/or still those of yester-year.”
When advisers were asked what were the top three areas within the later life lending sector which required innovation, 74 per cent said consumer education and 28 per cent said CPD/adviser education. Respondents expressed a desire for more information and help not only on how to find the right product mix for clients, but also information on the risks associated with these products explained in a more transparent way.