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Consumer Duty provided catalyst for later life mortgage innovation – Air round table

  • 26/03/2024
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Consumer Duty provided catalyst for later life mortgage innovation – Air round table
Later life specialist Air held a round table with key industry figures on the theme of comprehensive conversations.

The panellists agreed that customers’ needs had changed recently, and a number of factors meant people over 50 were carrying debt into retirement. 

The panel said looking at later life advice in isolation was no longer the best method, and this needed to be repositioned to put the customer and their affordability first. 

It was suggested that advisers take up the necessary training or consider referral partnerships. 


Equity release not ‘sustainable’ on its own 

David Forsdyke, partner and head of later life finance at Knight Frank, said that to adapt to changing needs, his team leant on the wider firm and did not solely look at later life products. 

“We look at the customer first,” Forsdyke said, adding: “And then we can tap into our collective expertise to find the right solution for them going forward.” 

He noted: “I don’t see that equity release advice on its own is really that sustainable anymore. You’ve got to approach it from the point of view of what it is the client needs, then look across the whole market, rather than just channel one path.” 

Will Hale, CEO of Key Group, said that, as a specialist in the later life lending market, he agreed with Forsdyke because the nature of customers had changed and those who were pigeonholed into needing equity release remained, but “more and more, we’re seeing customers whose needs are far more complex”. 

He said this was because they may be younger, or coming into the process with an existing mortgage that needed repaying, or have multiple properties and gifting aspirations. 

Hale said the advice process needed to consider the diverse customer circumstances. 

Andrew Kerry, financial solutions manager at Stepchange, said that in the past, it was easier to immediately recommend a mortgage, but noted “that’s no longer relevant”. 

“A later life lending adviser has to be skilled in determining the affordability… That’s the biggest evolution I’ve seen in the last 12 months,” he added. 

Charlotte Allen, chief compliance and risk officer at Key Group, said the Financial Conduct Authority’s (FCA’s) review of retirement income advice mentioned later life lending, suggesting “firms tended to approach lifetime lending as a distinct and separate area of advice”.

She added: “That emphasises there are wider needs now that need to be considered.” 


A hybridisation of mortgages 

Newly launched options such as payment term products are creating a “hybridisation” of the industry, the panel said, resulting in a continuous journey for mainstream and later life borrowers. 

Kerry said there was an attitudinal change, where it was no longer seen that a lifetime mortgage meant borrowers did not make payments. 

He said this created a “hybridisation” with a “sliding scale” of options ranging from making interest-only payments to voluntary repayments. 

Forsdyke said mainstream mortgage lenders were getting closer to the lifetime mortgage sector with the increase or removal of maximum lending ages. Similarly, Forsdyke said, lifetime mortgage lenders were “coming the other way” with products for younger borrowers. 

“I can see that evolution continuing to the point where you actually see a continuation – it actually becomes just a mortgage product that can potentially last your whole life if that’s what you need. That’s how I can see lenders adjusting,” Forsdyke added. 


Consumer Duty a catalyst for innovation 

The panel agreed that Consumer Duty would be a “catalyst” to addressing changing borrower needs, as the spirit of the rules encouraged more comprehensive conversations. 

Hale said this was also evident in the available product offerings as there were more types and options on the market, but said there were still gaps in addressing borrower needs. 

Kerry noted that a lot of product innovation had happened recently to respond to borrower circumstances, and he said he did not want to see that stop once the economy improved. 


More work needed 

The panel said adviser education, such as training through Air Academy, and referral agreements would help to enable more holistic advice. 

However, the panel said this was sometimes made difficult because advisers often relied on multiple sourcing systems and research platforms to find a single solution for a borrower. 

Paul Glynn (pictured), CEO of Air, said progress was being made regarding technology. 

Glynn added: “It’s refreshing to see so many industry experts committed to creating good outcomes for customers, with voices from advisers, lenders, industry bodies and funders all contributing to the conversation. Bringing some of these expert voices to the table to discuss the future of the advice process and the UK later life sector was a fantastic experience with some valuable results. 

“We thank all of our panellists for contributing, and are already adapting our Comprehensive Conversations campaign to include new points raised in the discussion.” 

To inspire the changes necessary, Air has developed the Comprehensive Conversations Manifesto. This can be viewed and signed here. 


The round table featured panellists including: 

  • Paul Glynn, CEO, Air
  • Keith Richards, CEO, Consumer Duty Alliance and chair of the Financial Vulnerability Taskforce
  • Will Hale, group director, Key Group 
  • Charlotte Allen, chief compliance and risk officer, Key Group
  • David Forsdyke, partner and head of later life finance, Knight Frank
  • Ben Waugh, managing director, More2life
  • Andrew Kerry, financial solutions manager, Stepchange

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