Peter Welch is head of sales and distribution at Bridgewater Equity Release
I’ve been asking myself the possible reasons why a mortgage adviser would want to read an article written by a representative of an equity release provider. So I came up with a list of good outcomes that could be achieved after putting my advice into action:
§ Increased income from the same number of customers
§ Ability to place more mortgages
§ Make more money for your introducers
§ Generate more referrals
§ Have more happy customers
§ Generate diversified income streams.
§ Same or lower compliance risk
§ Help boost the UK economy
§ Be part of making a genuine difference in people’s lives
So if one or more of the above grabs your interest please read on. If they don’t maybe you need to check your pulse or reassess why you give financial advice in the first place.
In order to achieve one or a combination of the above I’m suggesting something really very simple - go and find an equity release specialist, buy them a coffee, sit them down and talk to them about how they can help you and your business.
For example, ask them about how equity release can be used to fund the deposits of first-time buyers. Many parents and grandparents would love to help the younger generation get on the housing ladder but can’t because all their wealth is tied up in their property. I’m suggesting that when talking to first-time buyers who are struggling to get a large enough deposit you ask them these two questions:
- Are you likely to inherit anything from property in the future?
- If yes, did you know that it may be possible to bring some of that inheritance forward?
If the answer is yes to both then you have yourself a perfect referral to an equity release specialist.
Many people don’t realise equity release can be used for house purchase where the customer hasn’t got (or doesn’t want to commit) sufficient cash to purchase a property outright. Using equity release to buy that bungalow they never thought they could afford makes not only a retired couple happy but also your estate agent introducer who’s now made an additional (and unexpected) sale.
Another area where equity release is increasingly providing the only solution is divorce where one party wants to stay in the home and buy out the other (the divorce rate amongst the over 65s is increasing).
Probably the closest area to core mortgage business where an equity release specialist can help will be for those of your existing customers who are retired but are still servicing a mortgage. Inflation is rapidly reducing the disposable income of the retired and any future interest rate rises may put these customers into financial hardship. For some, cashing in equity to pay off debts can be a welcome lifeline that really does improve the quality of life in retirement.
Talking to a specialist will also reassure you that equity release is not just for the poor, it’s certainly not a ‘toxic’ sale as some would have you believe and often it can be used to increase the wealth within a family rather than erode it.
Finally we can’t ignore the ‘commercials’ in all this. Depending on the product selected equity release providers pay procuration fees of between 1% and 3.5% of the release amount and it’s common for advisers to charge additional advice fees. Therefore equity release specialists can offer meaningful introducer fees plus of course many specialists only give advice in this area and are happy to refer the mortgage enquiries they have back to out and out mortgage specialists.
If this has convinced you to find a specialist equity release adviser in your area then you can do this through word of mouth, internet, or seeking out members of specialist social network groups for equity release within LinkedIn.
So for a little research and the price of a latte, you might find an introducer partner that opens up many more possibilities for you and your customers.
