This state of affairs may be attributable, at lease in some shape or form, to the fact that too much inaccurate information about equity release is reported in the media. As an industry therefore, we must work hard – and we owe it to ourselves – to remove some of the stigma attached to equity release when talking to any of our customers.
I read an article in a solicitor’s journal recently written by an IFA who was urging caution to all customers considering equity release. When I checked the FSA register neither the author nor his firm had the relevant permissions to advise on equity release and from that all I can deduce is his comments were made as an ill-informed layman.
What this particular IFA hadn’t thought through was the additional potential work he has made for his fellow professionals and the subsequent distress this will cause to customers. I am aware of a number of cases where equity release specialists have had to re-visit customers to reassure them after their solicitor had showed them the article in question.
Does the IFA simply assume that only investment or pension specialists follow a robust sales process?
He is probably not aware that many customers, following a meeting with a specialist adviser, are told that equity release is not right for them. In this situation an adviser will often refuse to give advice on equity release products despite some customers being insistent.
All advisers, regardless of their specialism, need to be aware of the pros and cons of equity release and the additional guarantees offered by Ship member firms, so that in their day-to-day dealings with customers a fair and balanced view is fostered. Mortgage, protection, and pension customers of today are the potential equity release customers of tomorrow.
This means that there it is never too early to broach the subject of equity release with a client. The problem is how many mortgage advisers talk to their customers about the possibility of equity release in later life – possibly as a means of replacing long-term debt or even an endowment shortfall? Or, how often do pension specialists talk to their clients about the options available at retirement apart from state or privately-funded pension provision?
There has been a lot of talk about the demographic indicators pointing to a big uptake in equity release over the coming years. But unless these potential customers are educated about the options available to them, and the additional protection offered to them via SHIP products, there is a real danger that equity release will not be used to help the retired improve their quality of life when they most need it.
Peter Welch is head of sales and distribution at Bridgewater Equity Release