In the evolving landscape of later life lending, in my view, advisers tend to fall into three distinct cohorts: those who are active and fully engaged, those in the initial stages of engagement, and those who believe their clients are not suited to these products.
Understanding and addressing the perspectives of each group may be crucial for expanding the reach of later life lending and ensuring positive client outcomes; certainly, given it’s my contention that the latter group in particular might just need to ask the right questions to their client base to see that, at the very least, some will certainly be suited to the products.
Recognising each adviser group
As mentioned, the first cohort comprises advisers who are active and fully engaged in later life lending. These advisers recognise the growing demand for products like equity release and retirement interest-only (RIO) mortgages, and also the growing number of mainstream options.
They have invested, and continue to invest, in education and training to provide comprehensive advice and are likely to be reaping the financial benefits of higher procuration fees associated with these products. For these advisers, the key is to continue staying informed about industry trends and regulatory changes to maintain their competitive edge and provide the best possible service to their clients.
The second cohort includes advisers in the early stages of engagement with later life lending. These advisers may be exploring opportunities within their existing client base but have not necessarily fully committed to this market, or they may be part of a network, for example, that is exploring the market together, growing their proposition and partnering with companies like ourselves in order to get a full 360-degree service option that works for the customer demographic.
Encouraging this group to participate in initiatives like our Comprehensive Conversations campaign can be highly beneficial. By engaging clients in meaningful discussions about their long-term financial needs, these advisers can uncover opportunities for later life lending products.
For both groups of advisers who are within individual firms, but also networks and mortgage distributor businesses, providing access to training and resources will help them build confidence and expertise in this area, ultimately leading to increased business and income growth.
The third cohort consists of advisers who believe their clients are either not suited to later life lending products or, more specifically, have not discussed potential later life options with them.
At a more granular level, I’ve spoken to advisers who believe that there aren’t suitable product options for clients – as they move towards, or are already in, retirement – in the later life space, that would factor in affordability, such as payment of interest, etc.
My view is that this group in particular needs to have its assumptions challenged and we should be working towards educating it on how this isn’t necessarily the case, and how it can explore the diverse range of later life lending options available that can meet its customers’ needs.
It’s essential to understand that the financial landscape has changed significantly and how the options for older borrowers have expanded, and advisers need to be aware of the new opportunities that have emerged.
Capturing disengaged advisers
For advisers in this third group, it’s crucial to engage in open and honest conversations with their clients. Have they truly asked the right questions of those clients? Have they perhaps challenged the client on whether, for example, another product transfer option in later life is right for them, or whether there might be products more suited to their needs that are beyond the mainstream?
By understanding their clients’ financial situations and long-term goals, advisers can identify suitable products that may have been previously overlooked. Later life lending products are not one-size-fits-all, and there are options available that can address various financial needs without placing undue burden on clients.
In autumn this year, we will see a range of mortgage borrowers looking for options when the last time they remortgaged was immediately post-mini Budget, which, as we all know, was a high-interest environment with limited product choice.
Two years on, the financial landscape for these borrowers has evolved, and what was a low-product-choice environment has now shifted to one with more opportunities, especially for older borrowers. All advisers, but particularly those in the third cohort, need to stay informed about these changes and be proactive in exploring fresh solutions for their clients.
Ultimately, engaging with later life lending products can lead to positive outcomes for both clients and advisers. For clients, it means access to tailored financial solutions that enhance their financial security and quality of life. For advisers, it means increased income through higher procuration fees and the potential for long-term client loyalty and referrals.
Working together to find later life lending solutions for borrowers
The three cohorts of advisers each have a unique role to play in expanding the reach of later life lending.
Whether fully engaged, just starting, or sceptical about these products, every adviser can benefit from challenging their assumptions and exploring the opportunities available in this growing market.
By doing so, they can support their clients more effectively and achieve positive outcomes that lead to business growth and income enhancement. The evolving financial landscape presents new opportunities for later life lending, and advisers who embrace these opportunities will be well-positioned for success.
