Advisers weigh moving into equity release as mortgage business shrinks - survey

An increasing number of financial advisers and mortgage brokers are considering branching out to offer equity release products to clients as part of a more diverse advice offering.

Hodge Equity Release, a specialist equity release provider that has operated in the market since 1965, surveyed 92 IFAs and mortgage brokers considering entering the market and found that more than half were drawn to offering equity release advice because of the ongoing client interaction required.

Jon King, managing director of Hodge Equity Release, said: "Unlike sales of average mainstream mortgages, where the central premise of advice resides in the method and timing of repayment, advice for equity release hinges on ways to minimise the debt left to the estate once the client dies.

"In this respect brokers who enter the equity release market also enter a lifelong relationship with their client. Their role is no longer to explain how to pay off the loan, yet instead to service the loan for its lifetime and to ensure it is as competitive as it can be. This can and frequently will mean re-mortgaging if rates fall."

Of the respondents, 64 per cent already hold an equity release qualification and 54 per cent view it as a definite future growth area thanks to failing government pension provision. Meanwhile, 44 per cent believe equity release to be a good opportunity to increase client numbers and 34 per cent are considering entering the market because of current economic difficulties.

Hodge Equity Release was awarded Equity Release Lender of the Year at the Financial Adviser Awards in 2006 and 2007.