Peter Welch is head of sales and distribution at Bridgewater Equity Release
Anybody who’s been lucky enough to work with the team at Stonehaven will, I’m sure, join me in offering them heartfelt congratulations on their return to the equity release market. This is a positive piece of news not just for advisers, but also all customers and the industry as a whole and I’d argue spells the start of a new dawn for the equity release market as a whole.
You might be asking yourself, “Why is he so pleased that a competitor has returned to market?”
Well there are quite a few reasons.
Firstly, Stonehaven are a lifetime mortgage provider and don’t offer home reversion plans. The equity release advice process should point the customer in one of two directions depending on the customers’ soft facts so in theory we’re not actually in competition.
Secondly, the return of a lifetime mortgage provider is also highly significant because it signals there are new sources of funding opening up that weren’t available 12-18 months ago. So it seems obvious to say that someone out there has, a) the cash, and b) the confidence in the market to provide wholesale funds for equity release. Indeed could this herald the entry of previously unseen entrants to the equity release sector?
Also, Stonehaven re-entering with its own individual product set and property criteria means that more customers who want equity release are likely to qualify for a scheme. This in turn will mean advisers can help more customers thus increasing overall product sales for the sector.
Another provider with its own marketing and distribution effort will also increase adviser and hopefully some consumer awareness of the benefits equity release can bring consumers in later life. This wider marketing footprint for the industry can only be a good thing.
More equity release providers also sends the right signal to those stakeholders on the periphery (for example networks, banks and national tied/IFA firms) who may be see the market from their perspective as sub-optimal (that’s management speak for “not worth bothering with yet”).
Once the market starts to grow again these players may be encouraged to invest in distribution and/or products. Which, in turn, adds extra impetus to the market creating a self-feeding virtuous circle.
So, the return of Stonehaven is a welcome boost for the entire equity release market and one hopes it is the start of further newbies making their move. I wait with great anticipation to see who the next entrant to the market will be.
An old friend or a tall, dark, handsome and, hopefully rich, newcomer? All who are committed and dedicated to equity release are welcome.
