Less than half of advisers ‘highly familiar’ with new products
Written in line with our editorial policy.
If you’re aged 55 or over and thinking about releasing money from your home, recent research may give you pause when deciding where to seek product advice.
According to a new study by Air, which surveyed 200 financial advisers, 83% said they were aware of new product launches in the later life lending market. However, just under three-quarters (73%) or survey respondents had not recommended any of these new products to clients.
The concern however, is that less than half (47%) deemed themselves ‘highly familiar’ with innovations in the equity release industry, including higher loan-to-value (LTV) ratios and shorter and fixed early redemption charges. Customers can also benefit from personalised interest rates and increased flexibility in payment options that allow customers to repay interest, the loan amount, or both.
This raises an important issue for homeowners exploring lifetime mortgages or other equity release options – namely, whether they’re hearing about the wide range of new products that might be right for them.
The Air research found that:
- Just 42% of advisers were aware of term interest-only mortgages, which can offer regular monthly payments over a set period.
- Just 40% had heard of payment term lifetime mortgages, which blend equity release with scheduled payments.
- Only 40% were familiar with interest reward lifetime mortgages, which may offer lower interest rates to customers who make regular interest payments.
The data indicates that going to a more general financial adviser may not always result in hearing about the most suitable or up-to-date plans. In the fast-evolving later life market, that could mean missing out on the most suitable equity release product to meet your needs.
Will Hale, CEO of Air, explains: “Product innovation has created a complex landscape for mainstream mortgage advisers and later life lending specialists alike. Creating better outcomes for customers requires advisers across the market to engage with these services… or put in place referral arrangements with trusted specialists.”
