Speaking at the Later Life Lending Summit in London – hosted by the Equity Release Council – Nick Birdseye, strategic partner development director at L&G Home Finance, noted that recent reports suggest retirees of the future will need later life lending in some form to maintain their retirement, pointing to the Fairer Finance report as an example.
“We’re not going to serve that need with the current cohort of advisors that are engaged in the market. So as a sector, we really need to grow the distribution footprint in our marketplace and enable, in partnership with the regulator, making it easier for advisers to access our marketplace.
“Along with that, as lenders and as constituents of the sector, we’ve got to support advisers coming into the market and gaining the confidence to advise in our marketplace and giving them the tools to deliver outstanding consumer outcomes,” he said.
‘Pace of change’ in later life lending growing
Birdseye continued that the “pace of change is increasing” in the later life lending market, which “speaks really highly about the dynamism in our marketplace”.
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He explained that pre-2022 lending tended to be more “ambition and aspiration” based, whereas post-2022, due to pricing and product changes, there was a lowering of loan to values, so the “market retrenched a little bit to more of a needs-based market”.
Birdseye said that this “need is brought forward in a fairly short-term manner”.
“The absolute key to think about our market is it’s a very long-term market that’s usually initiated by short-term requirements. When we get into the adviser space, it’s absolutely crucial that advisers are thinking about that long-term customer need, not necessarily just what’s a short-term solution,” he noted.
He explained that most customers come to the later life lending sector when they are around 70 and many of them can now expect to live in their 90s, so a lender can hold onto a customer for around 20 to 25 years where a lot of life events can occur and can be “more difficult”.
Fact find is ‘fundamental’ in later life lending
Consequently, the fact find is “fundamental” and the discussions need to be “really deep conversations”.
“In our marketplace, it isn’t a thing where you can pick up a telephone or buy or direct from a lender, you have to, as a consume,r engage with an advisor and go through that process, and that’s absolutely right,” he said.
He continued: “The key to fact finding, it helps build trust with the sector. Our sector is not blessed with great PR, we work very hard on building that. For instance, with the four Ts of the Consumer Charter and the Equity Release Council standards, all build towards supporting trust in our marketplace.
“But we are where we are, so those deep conversations are really important to identify immediate vulnerabilities and anticipate future vulnerabilities, and then for advisers to select a lender partner that can deliver on those needs through the customer lifecycle.”
