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‘Brokers can refine equity-release process’

Refinement of the sales pro-cess for equity-release products and the identification of tax and benefits will bring a boost for brokers, intermediaries were told at Expo 2004 last week.

Key Retirement Solutions business development dir-ector Dean Mirfin said there are several opportunities for intermediaries to enhance the sales process of a product which is often difficult to communicate to clients.

First, he said intermediaries should produce a decision tree during the sales process which will lead to a clearly defined route which a simple fact-find cannot do.

Second, Mirfin said a relative or friend should be present when advisers see clients as this offers protection for both the intermediary and the client and can strengthen the adviser’s business by forging relationships with families.

Mirfin also called on int-ermediaries to be careful when looking at lifetime mortgages’ interest rates. Although the monthly compound interest may seem favourable, when annualised, it may not be as app-etising. He cited an example where a monthly compound interest rate of 6.74 per cent adds up to 6.94 per cent when annualised.

Mortgage Express product development manager Roger Hillier said the number of intermediaries selling equity-release products will reduce as a result of regulation but there will be an increase of introductions to equity-release specialists.

He believes the market would be strengthened if another big high-street name entered the market which is dominated by Northern Rock, Mortgage Express and Norwich Union.

Hillier said initiatives from the CML may help lifetime mortgages under the new FSA regime. The CML offers a tax and benefits guide to help lenders and intermediaries consider whether someone will be worse off in terms of tax and benefits if they take out an equity-release loan.

Hillier said: “There is real potential in equity-rel-ease business and its reputation should be enhanced by regulation.”

Mirfin said: “Ultimately, client preference will lead the way.”


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