New technology could play a significant role in helping potential customers carry out early research into equity release options before speaking to an adviser, providers have said.
Digital retirement solutions provider Abaka and equity release adviser Key carried out a study with a group of retired consumers aged between 65 and 75, which looked into their use of online channels to research equity release products and services.
The study found that providers’ websites were often among the first sources of information for the test group when looking into equity release. It also found a reluctance from participants to provide contact details during their initial research, to avoid being contacted too early during their decision-making process.
The research group tested a chatbot powered by artificial intelligence, designed to give personalised answers to customers’ questions on equity release. Participants seemed to favour the anonymity of using the chatbot and the freedom to ask multiple questions without perceived judgement.
The study also found that participants wanted to speak to a human adviser when they felt ready, and that face-to-face meetings with an adviser were still the main way they wanted to receive bespoke advice.
Speaking to FTAdviser, Jonathan Barrett, director of business development and partnerships at Abaka, said participants asked the chatbot questions such as what equity release could be used for, what it would cost them, and what would happen if they went into care.
Mr Barrett said a chatbot could help customers get to a stage where they feel informed before speaking to an adviser, rather than replacing the need for one.
According to Mr Barrett, customers can spend between six and nine months undertaking initial research into equity release.
Mr Barrett described older people not using technology as a common misconception.
He said: “There are simply not enough advisers to answer these initial queries and help consumers assess whether equity release is the right option for their retirement plans.
“Technology can help bridge that advice gap. Having an informative website that is easy to navigate is a good place to start, but tools like conversational AI can take that experience a step further, assisting consumers on their fact-finding mission before they’re ready to seek regulated advice.”
Will Hale, CEO of Key, added: “While we believe firmly in the value of face-to-face advice and the support that this can provide customers as part of the process of taking out a later life lending product, we know that there is often considerable thought and planning undertaken before they even pick up the phone.
“Informed customers who feel comfortable that their initial questions have been answered are going to be more confident in progressing to the next step of engaging with an adviser who can take a more in-depth look at how later life lending can support their retirement ambitions.”
Commenting on the research, Steve Paterson, equity release specialist at Later Life Money, said his view on the matter had changed in light of the coronavirus.