The number of advisers referring their clients for equity release has risen 285 per cent in the past two years but there are still concerns over an adviser shortfall in this area.
A report by Key Partnerships, out yesterday (July 4), showed the number of referral agreements between advisers over equity release had increased dramatically over the past two years and is set to grow further still.
It found the average introducer expects 11 per cent of their total income to come from equity release within three to five years.
Introducers, usually advisers unable to advise on equity release themselves, use partnerships to refer clients to advisers qualified to advise on equity release.
Jason Ruse, head of Key Partnerships, said introducers' confidence in the future of the equity release market was good news for clients as well as introducer businesses.
But he also raised concerns over what advisers who didn't have a referral partnership or equity release qualifications were doing to cater for their clients who might need these services.
He said: "Increasingly we are seeing people considering how they use their housing wealth in later life. How are you helping them and how far are you going to help them?
"From our discussions with advisers, another concern is that even some introducers might have outdated ideas of what a typical equity release customer is.
"As many customers are still unaware of their options and with only 9 per cent of our introducers actively marketing the products to their customers, how will people know who can help them?"
The issue of an adviser shortfall in the equity release space was also raised at a lifetime mortgage conference earlier this year (May 15).
Abbie Knight, head of digital at Embark, said financial advice should routinely discuss equity release and that it was unfortunate only a few advisers could advise on this asset class due to the extra qualifications needed.
Today's report also showed two thirds of introducers did not routinely mention equity release to clients and three out of five did not start a discussion about equity release despite having identified clients who could benefit from it.
It also found advisers preferred to refer on equity release as they believed the equity release market was a specialist one.
Mr Ruse said: "Encouraging trusted advisers to speak to their clients about the potential uses of property wealth helps people to think more holistically about their assets and helps specialists to support clients."
According to the report equity release clients brought through an introducer were shown to release more than customers across the market as a whole, taking out on average £10,000 more in property wealth.
The average amount released by referral customers was £85,099 compared to £75,032 for the market as a whole.
Alice Watson, head of marketing and communications at Canada Life Home Finance, said: "Advisers are critical to the sector’s upwards trajectory and the current advice gap may impact the market’s momentum.
"That is why it’s so important the sector does all it can to ensure advisers have access to the information and support they are asking for. Education and innovation will be crucial to the future of equity release."
Kay Ingram, director of public policy at LEBC, agreed there was more demand for advice on equity release and stressed financial planners needed to be aware of its use as a retirement planning tool.
She said: "All advice needs to be placed in the context of a holistic review of all options including equity release but not exclusively limited to equity release if consumers are to be given suitable advice."
