According to Key Partnerships’ Introducing the Introducers report, some 57 per cent of the 850 introducers polled said referral processes would need to be changed to meet the new standards. It was suggested that the requirement to ensure good customer outcomes will result in a more formalised approach to finding solutions most suitable for client circumstances.
Based on data pulled from Key’s Market Monitor, referral customers release more property wealth on average when compared to the wider market, at £133,048 against £114,354. The firm said some introducers recorded as much as £183,334 (n average) being released by referred clients.
Nearly a third (32 per cent) of introducers said they would advise firms similar to themselves to consider referring clients to equity release if they were not already doing so. Additionally, 30 per cent said similar firms should speak to equity release experts about the offering.
Some seven per cent of respondents said providing a referral service was a good way to see if clients were interested in equity release, while eight per cent said borrowers tended to be more open to the option than expected.
Of those surveyed, 11 per cent said referrals provided a good additional income stream, while 17 per cent advised firms to consider using equity release to help their clients if they were unable to do so themselves.
Ready to comply with Consumer Duty
Some seven per cent of the firms surveyed said they would need to make significant changes to comply with the rules, while 12 per cent said only moderate amendments were needed. Some 38 per cent said they would need to make just a few changes.
A further 22 per cent said no changes were needed as they were already fully compliant, and 16 per cent were unaware of what adjustments to make.
Jason Ruse, business development director at Key Partnerships, said: “While some organisations already have successful referral relationships in place, others have taken a more informal approach or been unable to support customers at all. Under Consumer Duty with the requirement to focus on good customer outcomes, a simple hand off will no longer be appropriate so we anticipate that we will see increased interest from a range of organisations.
“Businesses which need to comply with Consumer Duty will not be alone in looking to build referral relationships as more and more older customers consider the role that housing equity can play in their later life finances. We saw a record £6.3bn released in 2022 by people seeking to manage debt, support families and boost their retirement income as the cost-of-living crisis continues to bite.”
