Nearly two thirds of advisers are forecasting an increase in equity release enquiries, but are put off advising themselves due to concerns about access to research and being able to meet compliance requirements.
This is according to independent research conducted on behalf of Key Partnerships in November with 106 advisers specialising in retirement planning.
It found almost half (46 per cent) do not intend taking the equity release qualifications despite growth in the market, while just over half (52 per cent) are concerned about the compliance requirements for advising on equity release plans.
Another 48 per cent of advisers fear they do not have access to comprehensive data on the full range of products available.
However, one of the biggest concerns was that 40 per cent of advisers do not believe that equity release requires specialist market knowledge, potentially putting them at risk if their recommendations are challenged.
Key Partnerships suggested that all advisers should be discussing equity release opportunities with clients.
However, those without the appropriate qualifications, or access to the full range of products available, would benefit from having a referral relationship in place with a trusted partner.
Will Hale, director of Key Partnerships, said while it is encouraging that advisers are becoming more aware of the role equity release can play in retirement income planning, it is equally important they recognise the need for specialist advice.
“Equity release products require considerable understanding as simple variances can impact heavily on client benefits and the cost of borrowing. Getting it wrong can be very costly for advisers and their firms.
“Not all advisers want to specialise in equity release, but are aware offering advice can mean the risk of significant customer detriment if the advice is not appropriate.”
In October, the firm reported that the number of advisers registering for its referral service had grown by nearly 13 per cent in the previous quarter. Just over 500 advisers have registered since June, when the 5,500 total represented a 41 per cent increase on the 2014 figure.
Key Partnerships is a business to business referral service providing a whole of market solution for advisers and their clients, through parent company Key Retirement.
In return for the referral, advisers earn on average £1,300 on completion of the loan.
Last week, the latest Equity Release Council figures showed annual equity release lending reached a new high of £1.61bn, pushed on by drawdown product lending of £271m between October and December, the largest quarterly total since this type of lifetime mortgage first emerged in 2004.
In October, the council’s chairman Nigel Waterson commented this “upsurge in lending” means there is also a demand for appropriately qualified advisers.
He said: “Focusing attention on identifying potential opportunities in this area could be one of the better investments an adviser makes going into 2016,” he stated.
peter.walker@ft.com
