Legal & General has received approval from the Financial Conduct Authority to provide in-house financial advice on its lifetime mortgages.
The firm eyed the launch back in April of this year, saying growing customer demand for L&G-branded advice for its mortgage products had led the company to explore its options for providing advice in-house.
The new business, L&G Financial Advice, will form part of L&G’s Retail Retirement division and will be led by Sara McLeish as chief executive and Grant Hughes as managing director.
Ms McLeish was previously strategy and commercial director at L&G Retail Retirement while Mr Hughes was hired in April to take plans forward, having formerly been head of financial planning at Mercer.
Up until now L&G had offered its customers access to advice on equity release products through Key — a lifetime mortgage provider, adviser and referral service — and according to L&G, this relationship will continue through the transition until the new advice business has been launched.
At the time of the initial announcement, Will Hale, chief executive of Key, said he was looking forward to a “continued close collaboration” with L&G to ensure customers receive the “best possible service”.
L&G also stated it could continue to “work closely” with its other intermediary partners to improve access to and raise awareness around later life lending.
In April, the firm partly put its move into the advice space down to the growing lifetime mortgage market.
Lifetime mortgages are now estimated to account for about a third of all mortgages taken out by homeowners from their mid-50s onward compared to less than a fifth ten years ago, according to FCA product sales data.
The equity release market in particular has had a bumper few years, growing 32 per cent over the past two years.
Jane King, mortgage and equity release adviser at Ash Ridge Private Finance, said she thought there was potential for a conflict of interest when providers offer in-house advice.
She said: "From an independent adviser’s point of view, I’m not that keen on it. I don’t think it’s a good idea — in fact, I think it’s rubbish.
"There could be a better option out there for that consumer. Providers should stick to being providers and advisers to advisers."
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