L AT E R L I F E L E N D I NG Opinion
Demand for later life advice likely to grow
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ack of all trades, master of none’ is o en bandied about as some sort of insult, particularly to advisers who want to provide an array of services, perhaps in areas which some might feel require fulltime, specialist a ention. However, in today’s market, is that really the issue that some believe it to be? Wouldn’t you, as an adviser, want to be able to deliver a holistic offering for all types of clients, with all types of wants and needs? It certainly means you are fishing in a bigger client pond. That focus on the ‘holistic’ advisory approach, specifically with later life customers, is going to be much more important in the future, by nature of all manner of demand drivers.
Home as an asset As older homeowners become more comfortable with utilising their home as an asset, there is a growing understanding of the potential uses. For example, while we continue to see borrowers using their equity to pay off costlier debt or to pay off capital following the end of interest-only loans, they are also using equity to help their children, or maintain their standard of living into retirement or long-term care. They could also use it to fund bigger purchases such as cars, holidays, and the like. Now, of course, there has been a shi away from the la er type of uses, the ‘wants’, to ‘needs’ such as paying off debt. Nevertheless, homeowners still use later life lending for ‘want’ purchases, from the home of their dreams to a summer holiday. The wider point here is around the nature of lending into retirement, the degree of confidence homeowners have in this now, and where that might lead advisers.
Two sides of the same coin Traditionally, there was something of a sharp split in terms of, for example,
equity release specialists and those who worked more in the residential mortgage space. Increasingly, though, both sides of this coin recognise that being able to work in both sectors is a real benefit to the customer. This is helpful not only in terms of the transactional mortgage advice, but also servicing the full needs of that older client base. Just because they are taking out a later life mortgage, doesn’t mean they are not presenting with other needs, such as general insurance (GI) or protection, or the whole gamut of financial services needs the vast majority of people have, whether they are beyond 55 or not. Of course, as we touched on, if you are working with an older homeowner – who may well be looking at releasing equity to help family members – then you are certainly in line to help those family and friends who may benefit from this equity in some way, or indeed whose future purchases and activity in the property market are reliant on this case happening. They, too, will come with an array of financial needs that you as the adviser should be looking to cover, rather than le ing them ‘walk down the road’ to one of your competitors.
Transferable skills There is much to be said now for advisers having as many strings to their bow as possible. While we understand that this part of the market is different to the mainstream residential space, it is not a million miles away, despite what some might have you believe. The ‘so skills’ that you have in abundance can be easily transferable, and while you will need to be a specialist in later life lending, this is not a heavily segregated area of the market with huge obstacles that make it difficult to even get a foothold. Indeed, at The Right Mortgage we have a training academy specifically for non-CAS equity release advisers,
VICTORIA CLARK is head of equity release at The Right Mortgage & Protection Network
who we can help develop and nurture. We ensure they reach the level of competency required in this area, to provide those services to a client base which is growing in number.
Growth sector That’s the real heart of this argument for any adviser looking at the future and a empting to get a handle on what will be their growth areas. The traditional 25-year mortgage term, which ends just before retirement and ensures the individual does not take mortgage debt past 65, is not exactly a thing of the past, but it is certainly much less the norm. Homeowners are far more comfortable now with utilising their home, and indeed for many it is the only solution they have, particularly in a situation where incomes are fixed, and the costs of so many goods and services are rising. A large number of people won’t have the pension provision to maintain their lifestyles into retirement, while there is also a growing number who want to help family members, or indeed just help themselves in areas such as healthcare or long-term care provision. That signals to us that demand for later life lending advice is only likely to grow, particularly when you look at the trillions of pounds currently owned – and stored up in – the properties of older individuals in this country. If you’re considering whether you might be the individual or firm to tap into this space, then please get in contact. It may not be as difficult as you think, and the opportunities that it could open up are likely to be worth the effort. ● August 2023 | The Intermediary
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