For a start, AKG Financial Analytics’ research paper on the UK later life market, perhaps for the first time, gives us both a definition of later life lending and what it actually might be worth.

Firstly, the definition – ‘Standard, retirement interest-only (RIO) or equity release mortgages for borrowers over the age of 55 with terms that extend into, or start during, retirement’.

Now, on the face of it, many practitioners and stakeholders will say, ‘Of course that’s the definition’, but it’s not been widely agreed upon before, and there has been a tendency to look at this sector purely within the confines of equity release, even if we’re all acutely aware that the sector is much broader than this.

Introducing that definition also leads on to being able to assess its worth, and unsurprisingly, it goes way beyond the £6bn-ish of lending we might see purely in the equity release space in 2022.

AKG estimates that in 2021, £54.9bn worth of new later life lending and product switching took place, while it estimates the entire later life lending market is worth up to £153.9bn.

Later life lending is more than equity release

Why does this matter? Well, up until relatively recently we have tended to believe, as mentioned, that later life lending was simply equity release, but that due to the relatively small amounts of business being written, that it was a niche market, with a niche attraction for both advisers and providers.

Again, for us working within the space, we could see it was moving beyond that and the sector was growing strongly, but I suspect there were few of us who could put a figure on the entire market, let alone the business being achieved in any given year. And, if we could, I doubt it would be at the levels cited above.

This makes a huge difference, because it shows the significant amount of lending that has already taken place, but it also shows the potential that exists, and it generates a pathway for new entrants, both from an adviser and a provider point of view.

Ongoing education vital for later life growth

Now, of course, there are still obstacles to overcome here, and the report doesn’t shy away from highlighting those, particularly in terms of the ongoing education that is going to be required if later life lending is going to continue on this trajectory.

Those of us within the sector might think we have done a relatively good job in terms of both adviser and consumer education, but what strikes me from this report, and other research into this area, are the significant barriers that still exist when it comes to later life lending particularly around getting consumers comfortable with it.

The Equity Release Council continues to do sterling work in this area, but we know the sector comes with a large amount of historical baggage which can weigh heavily on consumers, even when it is the most suitable solution for their needs.

Standard Life Home Finance research into this area highlights the questions that are often raised around security of tenure, inheritance concerns, the expense and the complexity of the process, and of course the sector is still fighting a reputation gained over 30 years ago.

That said, we have the answers to alleviate all those concerns and the broader range of products we have now, the ways they can be used, the criteria elements that can ensure the client gets the money and the peace of mind they want, all add up to a position where these products should not be feared at all.

But, consumers are not going to know this unless we tell them. We recently held our national conference and the message that was heard time and time again around developing the sector, helping more customers, and advisers’ role within it, was about the ongoing need for education.

There can be no doubts that education will help us build on the very firm foundations we have in place and will open up the later life lending sector to far more practitioners and far more consumers who can benefit from it.

The interactive training programme is accredited by London Institute of Banking and Finance (LIBF) and aligned with the Equity Release Council’s (ERC) competency framework.

The modules include lessons on the industry, later life lending market, meeting client needs, soft skills, later life lending products, later life lending process, later life lending in the broader context and building a client proposition.

Once advisers have completed the programme then advisers gain accredited status and can display a “Accredited Later Life Lending Professional’ digital badge. They can also access exclusive products from lenders.

Air said advisers should complete further training on a yearly basis to stay up-to-date with the sector.

Stuart Wilson (pictured), chief executive at Air, said: “With the later life lending industry rapidly developing and changing, advisers are more focused than ever on building their skill set and understanding how they can best support their customers.

“We are therefore delighted to unveil the new look Air Academy which is designed to be the training platform for advisers wishing to hone their skills in this market. Underpinned by advanced technology and knowledgeable experts and aligned to the ERC’S competency framework, it provides advisers with access to eight LIBF-accredited learning modules covering a range of critical later life lending areas.”

He said that this was a “first for the market and part of our commitment to helping our members”.

John Somerville, head of financial services at LIBF said: “LIBF are delighted to be working with Air to accredit their academy and to encourage advisers to keep learning throughout their careers. The new ‘Accredited Later Life Lending Professional’ badge will help to build further trust in the industry and to demonstrate the high standards and good practice that we all value.

“With the later-life lending market growing significantly over recent years, we’re finding many more advisers want to do more in this area. While the CeMAP and CeReR qualifications are essential foundations for a mortgage career, its vital advisers keep learning and honing their skills as new approaches, products and ideas enter the market.”

I would suggest there is something of a misconception about the equity release and later life advice market when it comes to complaints. A belief perhaps that the sector is inundated with them, when this couldn’t be further from the truth.  

The Equity Release Council (ERC) looks into every complaint put to the FOS with an equity release element and it tells me that last year there were 271 complaints which mentioned equity release. Around 77 of them were actually about equity release, and only eight of them were upheld.  

Of course, these complaints were not necessarily about the advice provided, but you don’t need to know that to see this is a very low level and the vast majority were not deemed to be complaints requiring redress. 

However, even the threat of a complaint is not a pleasant experience and it’s perhaps no wonder that advisers will want to do all they can to ensure they don’t have to go through this. If it’s any help, FOS offers a hotline that advisers can contact to get advice on how to deal with complaints and which can act as a hand-holding opportunity, that might be particularly relevant if you’ve not received one before. 

Making use of reinforcements 

This low level of complaints is satisfying and, given the rigorous regulation we have to abide by and the high level of standards put in place by the ERC, for example, it is not surprising, but there are always elements to look out for which could result in that number rising. 

One area of particular focus for everyone involved in this sector – and indeed, wider financial services – is that of client vulnerability, how we recognise this and having the systems and processes in place to deal with these cases in the right way. 

Now, it’s a sweeping generalisation to suggest that just because the client is older in the equity release space that they are vulnerable in some way, but it’s also clear that the risk of vulnerability could well rise, the older the customer is. Equity release advisers with any experience will have quickly recognised the need to be vigilant in this area, and back in the day we would probably have said that teasing out this information was part of the ‘soft skill’ set required in this sector. 

However, as you will know, vulnerability is taken far more seriously right across the board, but particularly in regulatory circles, and advisers need to be able to protect both themselves and their client.  

That leaves advisers requiring the tools and services to be able not just to identify vulnerability and document this, but to be able to take that ‘diagnosis’ and to turn it into a means by which they can be safe and robust in terms of any advice and recommendation they provide to this client.  

It is not necessarily an easy path to tread, which is why we have been working with vulnerability specialists, Comentis, to develop the technology required, to build this into the factfind, and to flag potential vulnerability, to provide recommendations about how to address this, and how to handle the client going forward. We’re also trying to ensure the delivery of this is not overly burdensome for the adviser, and that it simply sits neatly within the systems already being used. 

It’s an obvious point to make but we have to get this right, because failure to do so will inevitably lead to potential consumer harm which in turn will lead to complaints.  

Financial vulnerability, especially during a period like we are seeing now, is going to rise, so let’s make sure we are doing everything we can to firstly, identify it, and then help customers and ourselves to get the right outcomes for it.  

The borrowing forecast shows the impact of different interest rates, ad hoc fees and penalty free repayments as well as any potential future drawdowns, on top of the cost of a specific lifetime mortgage.

An annual cost table compares two products to show which is less expensive each year.

The rebroke tool helps users explain options for individual clients. Fees and early repayment charges are factored in to show which mortgage will be cheaper and the annual cost savings.

It will also produce a clear graph of the existing mortgage compared to the new lifetime mortgage with the option to include property value inflation.

Stuart Wilson, chief executive at Air Group (pictured), said: “While each adviser has their own approach to explaining how equity release works and the various features of these products based on regulation, concerns have been raised about whether customers truly understand issues such as the cost of these products over a lifetime.

“To further support our members, we have launched new borrowing forecast and rebroke tools to aid in the advice process.

“This will add another string to our members’ bows when they are working to support their customers with user-friendly graphs, tables and illustrations.

“These can be included within the suitability report and for compliance purposes will provide further evidence of the in-depth nature of the advice given and time taken to explain these important points.

“With the market growing rapidly and more customers than ever considering what role housing equity can play in their later life finances, AIR remains committed to helping advisers support more customers with a wider range of different tools, systems and training.”

We would perhaps have suspected nothing less and I hope that the administrative problems and issues which appear to have blighted the scheme are starting to be sorted out, and that refugees are beginning to be housed here in order to give them the stability and safety they need and deserve.

I’m led to believe that the numbers are rising – although probably still not fast enough – and that progress is being made.

Implications for equity release and later life clients

You might wonder why I’m raising this in an article which is normally about the equity release and later life market, and for an adviser audience, and the reason is that the Homes for Ukraine scheme does have implications for equity release and later life customers who are opening up their homes to refugees.

It’s something that advisers, and clients, need to be aware of because just as lenders and providers would want to know if a customer of theirs had new adult residents in their property, this might also be the case with the Ukraine scheme.

Of course, lenders and providers are obviously sympathetic to what is happening in this situation and the decision the homeowner is making, so there may not be a major concern here, however advisers should still make their existing and new clients aware of this.

For members of the Equity Release Council, there is already a document available – helpfully put together by the council – which covers how all equity release and later life lenders and providers are approaching this issue. It can be accessed via the members section of the council website.

It could affect clients’ insurance

However, one further aspect which I’m not sure has been covered and may be as relevant in the residential borrower space as the later life one, is how insurers might approach new people being resident in the home?

I’m not fear-mongering here, but as a worst-case scenario, accepting refugees into a residential home might invalidate some insurance policies, although again I’m sure there will be sufficient flexibility provided by the insurer.

Clearly, we don’t want to put off any family or organisation that wants to shelter refugees. But we might suggest they double-check just to understand how they might view this, and whether there are any potential ramifications for such a decision on existing policies, particularly in terms of contents insurance and the like.

Opening one’s home to those fleeing such a terrible situation is a wonderful thing to do, and it’s my sincere hope that more people will continue to do this, and our government goes the extra mile to make the most of this generosity.

If you, or an organisation you represent, want to record your interest to take part in the Homes for Ukraine scheme, you can do so here.

While advisers will naturally be familiar with many of the common offer conditions that follow an equity release application, there are some unexpected nuances or unusual conditions that can throw a proverbial spoke in the wheels of the process.

Failure to prepare for this can be extremely costly for both adviser and client, either causing inconvenient holdups or potentially derailing the application all together.

Preparation key or average time scale could double

Dealing with such conditions effectively and efficiently is best achieved by preparation, so clients can have the necessary documentation ready to submit to solicitors or the lender.

Indeed, five minutes of foresight spent reviewing lender resources and factsheets can cut days of delays, allowing applications to run smoothly as obstacles are overcome in advance.

For example, how many clients would think to note that they have a septic tank on the property? If so, their solicitor will need to confirm several details with the equity release lender, including evidence of draining, installation and servicing compliance.

Advisers should therefore gather such documentation ahead of time at the initial customer appointment and send it in alongside the application.

If unprepared, advisers and clients could face an average timescale from offer to completion of 47 days – more than twice that of the more common cases where the only offer condition is a repayment of any existing charge on completion, which usually take only 22 days to complete.

Prepare for property proof problems

As the world grows more conscious of its carbon footprint, more homeowners are opting to install solar panels onto their property which can also trigger unexpected offer conditions. Just as with the septic tank, if there are solar panels on the property then relevant documentation needs to be provided to the lender, in this case proof of ownership. Some homeowners may own the solar panels outright, while for others they may be leased, but either way proof of this must be provided.

Ultimately, these delays can be easily avoided with sufficient preparation, meaning advisers are able to anticipate offer conditions before they are mandated. There is a wealth of educational resources available in the sector from advisers, industry bodies and lenders allowing advisers to access necessary support.

Taking some time to become familiar with both the most common offer conditions, the unusual ones and some of the often unexpected nuances can pay real dividends.  Especially as in this fast-moving market, you do not want to exceed the offer period and see the guaranteed interest rate lapse as you may well find that your client loses out.

By being two steps ahead, advisers can not only ensure that their client is happy but have more time to spend on new business rather than managing admin.

This was a 34 per cent increase on the equity released from homes by borrowers aged 55 and over in the first quarter last year. 

According to the Equity Release Council’s (ERC’s) market statistics for Q1, the number of borrowers accessing equity release reached a quarterly high of 23,395. This is the first time customer numbers have exceeded 23,000 during any quarter. 

This was also a rise on the 19,975 customers serviced by the sector in Q4 2021 and the 16,527 borrowers recorded during the same quarter last year, when pandemic restrictions were still in place. 

Kay Westgarth, head of sales at Standard Life Home Finance, said: “This level of growth echoes the increasing demand we are seeing for equity release products as a greater number of over-55s recognise the benefits of later life lending as a way to boost their retirement income.” 

Borrower trends 

The number of new plans agreed amounted to 12,174 in Q1 2022, a 21 per cent increase year-on-year from 10,030 in Q1 2021.  

March was the busiest month for new plans with 4,560 completions recorded. This was the same month the ERC announced its fifth product standard, allowing new customers to make penalty-free partial repayments. 

Will Hale, CEO at Key Later Life Finance, said: “Product flexibility is vital to the sector’s continued development, and it is worth noting that customers saved almost £100m in future interest costs in 2021 by making penalty-free partial repayments.   

“With the introduction of this flexibility as the fifth ERC standard, customers now have more choice than ever before to find a product which fits with their changing circumstances through later life.” 

Drawdown lifetime mortgages were the most popular product type for new equity release borrowers, accounting for 54 per cent of plans while the remainder opted for a lump sum lifetime mortgage. 

The average size of the first drawdown instalment made by new borrowers increased by five per cent to £94,215 while the average lump sum rose by seven per cent to £131,781. 

Combined, the average loan accessed by new equity release customers increased by six per cent annually. This matched March’s inflation figure but falls behind the 11 per cent annual house price growth. 

Stuart Wilson, CEO at Air Group, said: “Until inflation starts to ease, we anticipate that we will see the number of borrowers using later life lending to reduce the pressure on everyday expenditure continue to build.” 

Existing customers 

Some 9,450 existing customers with drawdown lifetime mortgages withdrew funds from their agreed reserves. This was an increase on the 7,571 recorded in the previous quarter and the 5,566 seen in Q1 last year.  

However, it was below the pre-pandemic peak seen in Q1 2020, when 9,805 existing drawdown lifetime borrowers released funds. 

Stuart Wilson, corporate marketing director at More 2 Life, added: “With drawdown products currently making up almost three quarters of the plans sold annually, it is good to see these flexibilities in action and shows a robust path forward for the sector.  

“Looking to Q2, it’s likely that with inflationary pressures adding to existing demographic drivers, more over-55s will seek to augment their income and support loved ones by tapping into their equity while house prices remain high.” 

Some 1,771 further advances were agreed by existing borrowers. 

David Burrowes, chair of the Equity Release Council, said: “The popularity of equity release so far this year is the natural result of modern products offering greater flexibility and a property market where growth has far outstripped inflation, alongside an ageing population.” 

LPAs allow people to choose someone they trust to make decisions on their behalf if something happens and they are unable to make decisions for themselves. With an ageing population that is borrowing for longer periods and starting the mortgage process later in life, financial advisers are under increasing pressure to enquire about LPAs.

However, in addition to statistics provided by the Office of the Public Guardian (OPG), which governs LPAs, a recent survey of 2,000 UK residents by consumer campaign group Which? also showed significant gaps in public understanding of the power of attorney system.

While LPAs are most commonly set up by individuals who are facing a deteriorating disease, like dementia – which one in three people will develop; or a brain injury, for which someone is admitted to a UK hospital every 90 seconds – it is advised that everyone have one.

As Stuart Wilson, CEO of Air Group, pointed out in a recent piece for Mortgage Solutions, LPAs are a major safety net for those with property assets in case of the unthinkable.

Julian Mann, independent mortgage and protection adviser at MCB Financial Services, added that later life borrowers were particularly affected.

This means identifying and managing vulnerability has become an increasingly important topic for advisers.

What is an LPA?

An LPA is someone legally appointed to make decisions on someone’s behalf for the rest of their life should they become medically incapacitated and unable to understand or make decisions for themselves. At all times the attorney has a legal duty to act in the best interests of the donor. Attorneys don’t have to be family members – just anybody the donor trusts to look after them properly.

An attorney can only act in accordance with the power they have been granted by the LPA, which can be restricted by the donor.

An attorney cannot use a financial LPA to make a will on a donor’s behalf. If a donor has lost capacity and the attorney feels that the donor requires a new will, they must make an application to the Court of Protection. The Court of Protection would then decide if a “statutory will” is required.

There are different types of LPA and various ways to appoint them, such as jointly or with reserves. It is recommended to have up to two ‘first choice’ LPAs and two reserves.

A property and financial affairs LPA is an attorney who can deal with any decisions regarding the donor’s property and finances, including things such as managing buying and selling the donor’s property, paying household bills and managing the donor’s bank account.

You can also have a health and welfare LPA who can make health and care decisions including what residential care setting the donor lives in.

The benefits of an LPA

According to the OPG, there are many misconceptions, such as the next of kin having the final say or a joint bank account and joint names on a home meaning the other party can legally make decisions for them. They don’t and can’t.

Fiona Bushell, will, trust and estates solicitor at Irwin Mitchell (pictured), said having an LPA in place can therefore save a person months and thousands of pounds in court and legal fees in the case of incapacitation.

She said: “Getting an LPA costs £82 per LPA for the registration fee but it can’t be used until it’s registered – which generally takes the OPG up to five months.”

Wilson added: “LPAs should be mandatory with equity release products, especially in a sector dominated by drawdown where if a customer isn’t able to make decisions for themselves – for whatever reason – but doesn’t have an LPA in place it means they can’t access the money that is rightfully theirs.”

Get professional help to avoid pitfalls

LPAs are fraught with bureaucratic potholes that can cost time and money.

Bushell said: “It’s important to take advice and explain the different pitfalls and options, especially after taking all that time, or if you lose capacity since making the LPA, then you’re back to getting a deputyship.

“People can do LPAs themselves online but there are a few quirks about it and they are quite lengthy documents and have to be signed in a particular order. If they’re not signed in that order then the OPG will reject it and keep the fee. They don’t offer refunds, but you can then pay £41 to resubmit.”

What people often miss

There are different ways to appoint attorneys, so choosing the right type of LPA from the beginning is vitally important.

Bushell said: “If you appoint first place attorneys jointly so they all have to agree together on a course of action and one of them dies, or you divorce, then all of their appointments get terminated.

“Whereas, if you set up replacement attorneys during the first round then you won’t have that problem. You can also nominate replacements depending on how you make those appointments in the first place.”

LPA versus court appointed deputies

The automatic go-to should the worst happen without an LPA in place is deputyship. It is run by, and answerable to, the Court of Protection, unlike LPAs. As well as eliminating the donor’s choice in who represents them, the process takes months and can cost families thousands of pounds when time and money will be serious and urgent factors.

Bushell said: “With the LPA there’s no waiting around for the court application, and they’ll be able to act on the individual’s behalf the very next day. If you lose capacity without an LPA then your family or friends has to apply to the court of protection for a deputyship order. The deputy acts in the same way as an attorney but they answer to the court, rather than the individual whereas the LPA answers to the OPG.”

How does an LPA affect brokers and lenders?

Clients with power of attorney are subject to greater scrutiny by lenders and equity release providers. They will generally avoid them if they can due to the extra paper work and checks, such as any limits on the attorney’s conditions.

Darryl Dhoffer, mortgage and protection consultant at The Mortgage Expert, who specialises in complex cases, said: “The sale of mortgaged property and the subsequent closure of a mortgage is generally accepted by all lenders only if power of attorney allows the donor to deal with financial affairs.

“An LPA case has extra underwriting being undertaken, so in general, any capital raising or change of ownership overall will see very few mortgage lenders willing to accept, if at all.

“That said, if capital raising is to help with donor care costs or home alterations for mobility support, this may be granted. It is also possible to undertake a product switch with the existing lender, but not all lenders, and this will be down to [each individual] lender.”

Stuart Wilson, corporate marketing director at More 2 Life, added: “There has been significant progress made in improving processes across the industry. With vulnerability moving ever higher up the regulator’s agenda, advisers should also remember that lenders are equally committed to good customer outcomes and typically eager to help.

“Almost two thirds, 63 per cent, of respondents to our survey said industry support had improved over the last 12 months so, in addition to their own colleagues, advisers will have a range of resources to access which can help them to understand and embed best practice within their business.”

Other roadblocks around LPAs and deputyships

Mann, who has spent the last nine years advising in the later life sector, told of a rare, recent case in which a client had dementia, but already had an LPA. The client’s local council had refused to provide vital night time care, so her family had to fund it and was looking to remortgage, a process that usually takes up to six weeks.

He said: “It’s stress, time and money. We started in November 2020 and we still haven’t completed. With late term mortgages, the lender or solicitor must still confirm that the client has lost mental capacity, which doesn’t apply to other mortgage types.

“The lender won’t accept the application until the incapacity has been confirmed. We looked into getting a specialist medic for an independent assessment, but that’s £900 and causes more stress and anxiety. Even the valuation was hard because the valuer was refused entry to the house by the client three times as she didn’t know who they were.”

He added: “When someone has an LPA it’s still very difficult. There’s a lot of people who need to be helpful for that document to be usable and it isn’t actually always the case.

“The common problem is that GPs are reluctant, or refuse to write a letter to state that the client has lost mental capacity. We spent nearly a year getting nowhere with this poor lady’s GP, which has caused major issues getting her overnight care.”

What should financial advisers do about LPAs?

When it comes to the difficult client conversations around vulnerability, there are some approaches which can make it easier and less awkward for all concerned. This can be difficult unless advisers can have a face-to-face meeting, which has been hampered by the pandemic in recent years.

If an adviser is not satisfied that their client is capable of giving instructions, then they should ask if they have an LPA in place. If they do, and are happy for third parties to take instructions from the attorney, then that might be possible.

However, if a client loses capacity in the middle of a transaction without an LPA, the transaction will be stalled for several months while the deputyship order goes through the courts.

More 2 Life’s Wilson said: “The focus must be on making clients feel valued and supported in order to be open to have these often deeply personal conversations. Our recent research into vulnerability found that 50 per cent of advisers reported that the lack of face-to-face meetings during the pandemic made it harder to identify vulnerable characteristics.

“Involving family in the conversation where possible will also help vulnerable clients to feel supported, and family may be able to provide more context on the client’s situation that they themselves would not think to mention. This is something that advisers are already prioritising, with 75 per cent of those we surveyed in 2021 stating that they were keen to involve clients’ family members in the equity release process. Only four per cent felt that family involvement was not at all important.”

How to manage suspicious LPAs

Bushell advises that in circumstances where there seems to be something funny going on between the LPA and the client, the broker must make a referral to the OPG to raise those concerns, and they will do their own investigation if necessary.

She recommended that advisers do not proceed until the investigation is satisfied that the instructions are what the client would or does want and to either terminate them or put them on hold pending the outcome.

It is with us all every single day, and in recent weeks – and in horrendous circumstances – it is there on our television screens daily too as a consequence of Russia’s invasion of Ukraine.

Death cannot be beaten or cheated, it is a racing certainty of life and yet the thought of it often turns our stomachs and for the vast majority ‘doesn’t bear thinking about’.

For advisers however it, at the very least, has to be addressed, and even more so for advisers with later life clients – not necessarily because they are more likely to die sooner but because the consequences of them doing so are perhaps more far-reaching than for others.

Take wills, for example. According to Canada Life, 31 million UK adults don’t have a will in place and while that number grows smaller the older people get, the thought of working with an older homeowner who doesn’t have their affairs in order should be an uncomfortable one for most advisers.

The feedback I get from later life advisers is that they will often raise such matters with clients although as one adviser recently told me, the client “will very rarely do anything about it. They see the sense but it’s difficult for them.”

Lasting Power of Attorney

In our product space, the Lasting Power of Attorney (LPA) is another key area that needs to be addressed. And again, even though it is, those advisers who are writing such business is extremely low.

I’ve often thought that LPAs should be mandatory with equity release products, especially in a sector dominated by drawdown where if a customer isn’t able to make decisions for themselves – for whatever reason – but doesn’t have an LPA in place, it means they can’t access the money that is rightfully theirs.

In that sense, LPAs which ensure those instructed are able to make these important decisions seems like an obvious element to incorporate into the provision of advice, because while people clearly won’t think that anything untoward can happen to them, it does. It happens to people every single day.

Historically, there has been a slight reticence from some advisers to get involved in this aspect of the market. Which if you think about it is just another form of protection, albeit a legal one.

Perhaps they think they don’t have all the necessary detail, information or experience to be able to help a client here, or they are still not comfortable broaching these issues. Which I suspect is less of a concern for later life advisers, but you never know?

The issue of who to partner with on this can also be a tricky one, as is the price, which often differs greatly across regions, and it’s certainly the case that there are – shall we say – ‘less robust’ propositions out there which could end up causing more trouble than they are worth.

How advisers can help

What appears to be important though is having a national solution, one that can provide those services to clients in a trusted manner, whether that is face-to-face, via tech, or indeed on a self-serve basis. We’ve certainly been looking at options in this area for our adviser members and hope to be announcing a partnership which covers all these bases in the future.

The point however is really not to shy away from the conversation.

Of course, few people will want to talk about their own death, or potential catastrophic ill-health, and we clearly wish all our clients are a long way from either.

But you cannot get past the reality of life, and how it moves on and eventually ends.

It’s far better to have your clients in the best possible position to deal with all manner of life events, and death, and for you to help them through this process, rather than potentially leaving both them and their families in a terrible position should the worst happen sooner than expected.

The results of our most recent iteration of the ‘Temperature Check’ we carry out on equity release providers seems to show this in abundance with a significant number of changes in the last six months of 2021.

Providers such as One Family, for instance, who had not featured heavily prior to the last six months appeared to find their service feet and made a concerted move up the league table in terms of such process-driven aspects as ease of application, speed of pre/post-offer, communication and online service, but also in terms of whether an adviser would recommend them and whether they go the extra mile.

It’s this combination of the tangible speed-focused factors and less tangible ‘feels’ that can set a provider apart, and this is clearly something that this provider in particular has been working on.

Now, other providers might suggest, ‘Well they don’t carry out as much business as us’, and while factually correct it shouldn’t really be a factor in terms of the way they are processing business, the way they are dealing with advisers and their clients, and the overall service they deliver.

Admittedly, the period covered by this latest tracker – H2 2021 – was one in which providers would have been dealing with large numbers of cases in less than ideal circumstances. Staff continuing to work remotely, with other stakeholders in the same situation, and other factors such as the stamp duty holiday deadline, also making their impact felt.

However, as a number of advisers have recently pointed out, the ‘excuse’ of Covid-induced service problems doesn’t tend to wash as much as it might have done in the past.

Bigger picture around growth of later life market

Now, of course, service issues are often temporary and can be turned around in double-quick time; however they may also leave a lasting sour taste in the mouth, and shape what happens next in terms of future business.

There is however a bigger picture here to look at and it’s one that focuses on the need for service continuity and excellence in order to deal with the anticipated increase in overall later life business we anticipate will come.

We talk much in the later life sector – particularly in equity release – about the potential this market has and how we want to see it develop from a near £5bn lending market to one that is comfortably double that.

However, providers in this space are going to have to find a way to manage the influx in business in order to deal with increased transactions. 2021 was of course a challenging year for all manner of reasons, but you’d really want to see our sector being able to comfortably show how it coped with that busy period, and how it now has the foundations to deal with increase upon increase of activity.

Certainly, some providers appear to have it more than right in terms of their service offering, while others might need to look at where they might not have hit the mark, how they stop that happening again, and where they require extra resource in order to cope with what might be coming over the horizon.

Strong demand is one thing as is demographic and societal shifts meaning later life products are much more front and centre for advisers now. But that business needs to be serviced effectively – in that sense, we’ll continue to work with providers to ensure those standards remain high and to highlight where work might be required. It’s an industry problem that will need to be solved with industry answers.