Advisers have called for a move away from the use of ‘equity release’ branding on lifetime mortgage products, arguing providers need to adopt “a broader later life lending strategy” to better engage and reach clients.
Air Mortgage Club, which rebranded from ‘Equity Release Club’ back in June 2019, surveyed 400 advisers - 80 per cent of which agreed that it would be “in the best interests of all stakeholders” if the term ‘equity release’ was dropped in favour of a wider term, such as ‘later life planning’.
Some firms have taken the branding issue around equity release into their own hands. Earlier this month, Pure Retirement released a report entitled ‘Effective Brand Positioning Today for the over 50s Market’, designed to help advisers overcome the barriers they face when pitching the product to clients.
But 41 per cent of advisers Air Mortgage Club surveyed still believed the market remains too heavily focused on equity release.
“There is a real appetite to rebrand, re-educate and re-engage,” the firm found. “The first step is the need to ‘rebrand’, moving from seeing the market as being focused on a simple single equity release product choice to a more holistic later life lending approach.”
Stuart Wilson, chief executive at Air Group, the later life lending club’s parent, went as far as to suggest a “regulatory solution which is more ‘later life lending’ focused” could be considered.
Currently, regulation effectively places advisers into silos between equity release and mainstream mortgages – which cover retirement interest-only loans (RIOs) and mortgages for older borrowers.
To advise on equity release, a broker needs the special qualifications and authorisations from the regulator. However, RIO mortgages and mortgages for older borrowers can be advised upon by mortgage brokers who don't have these equity release qualifications.
As a result, later life lending is currently a fragmented market. This is why Air Group is pushing for the industry to join back the dots, in order for advisers to become more involved in overall later life lending advice.
“At present, consumers may be getting solutions based on what the adviser can’t advise on, rather than what they can,” Wilson explained.
Lack of resources
One issue the research highlighted was the lack of resources available to advisers as a whole. It found specialists in later life lending as a whole were more likely to use the term ‘later life’ when discussing options available to their clients, compared to the wider adviser community – 59 per cent versus 37 per cent.
Air Mortgage Club put this down to the fact specialists are able to provide advice on the entire range of options, suggesting more generalist advisers were being held back by a lack of knowledge or resources.
“Advisers were also keen that we focused on re-educating consumers and the wider industry to the later life lending options available and re-engaging with stakeholders to support the growth of the market,” Wilson continued.
“Over the coming weeks, we will outline the key findings around these important ideas and delve into the research further.”