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LATER LIFE THE FAMILY BANK The average property price in the UK increased by 8.5% in the year to December 2020, reaching a record high of £252,000, according to the latest House Price Index by the Office for National Statistics (ONS). First-time buyers – who on average need the most help with purchasing a property of any borrower group – are facing an average house price of £209,163, data from Yes Homebuyers shows. A 15% deposit on a property with this value would come to £31,374. Humphries notes that intergenerational lending is another matter that is growing in popularity, and shaking off some of the stigma it might have carried before. As a result of these combined trends, older individuals are incurring more debt in order to assist younger relatives onto the housing ladder, which is adding further to the importance of the later life market. A HOLISTIC APPROACH In order to embrace and cater to the diverse nature of borrowers’ needs and financial histories, it is important that the market lean towards a more holistic approach, in which an adviser is able to recommend and outline a range of products, rather than adhering to strict siloes in which customers get mortgage products from one broker and equity release products from another specialist. A holistic approach might sound ideal in the face of a complex and changing market and evolving customer needs, but it is not always easy to recreate. Hale says: “A holistic approach to later life lending is an admirable object; however, it is very hard to deliver from an advice perspective.” A more achievable element of this holistic approach might be in the consideration of the customer, though. Hale explains that it is essential that the industry looks
“The definition of the later life market is broad. We are looking into how customers are adapting and evolving over their unique retirement journeys” MARIE CATCH
at each customer individually when considering what advice to recommend: “It is important that for any customer coming into any advice process that we take a holistic view of that individual.” Catch adds that the industry must signpost what it does, and advisers should recommend that customers go elsewhere if they are in need of specialist expertise in a particular area that they are unable to offer. “There needs to be a qualification standard amongst the industry so that people can correctly recommend where customers need to go in order to receive the right advice,” Catch says. She goes on to explain that advisers should all receive a foundation of knowledge within the retirement part of the industry, so that they know when to bring in a specialist to assist the customer. However, this concept is still a work in progress, Catch says: “We as an industry have not yet figured out the best way for advisers to receive this general foundation of knowledge. While there is the qualification route, many advisers do not wish to be qualified in each area of the industry, as they may not intend to directly advise on it.” MAB is broken down into specialisms, each of which focuses on different areas of the market. Humphries believes that whilst this is an effective approach, care must be taken to maintain good customer service, and to prevent a customer being passed from one adviser to the next. To this end, a mortgage adviser must position themselves as the centre of influence for their customers, so that they can refer to a specialist if required whilst remaining that person’s port of call throughout the transaction. Hale concurs believes that mortgage advisers across the UK could benefit from being up-skilled, so that they are able to correctly refer customers to the right specialists when needed. In a similar vein, Humphries recommends that mortgage and protection advisers consider a customer’s entire journey over their lifetime, and the different advice that they will require as they age, while Catch believes that firms must consider how they intend to support customers throughout this journey before they enter the marketplace. “The cost of customer acquisition is increasing, so from the mortgage adviser perspective, they must retain consumers by correctly advising them throughout their journey,” Humphries adds. →
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01452 310777 MARCH 2021 MORTGAGE INTRODUCER
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