more 2 life has called for advisers to be better educated about the benefits of lifetime mortgage products.
The lender has highlighted the need for brokers and financial advisers to have a clearer understanding of situations in which lifetime equity release products offer the best financial option for clients.
Equity release lending hit £1.6bn in 2015, and the market is on target to exceed the £2bn barrier in 2016, according to figures from the Equity Release Council.
Stuart Wilson, channel marketing director at more 2 life, said: “The market needs to raise awareness about retirement lending if it wants the lifetime mortgages sector to grow. To achieve this goal, we would like to see more advisers entering this space and advising on equity release.
“At present, many advisers do not hold the necessary equity release qualifications, however, that should not stop them from introducing their clients to lifetime mortgages and referring them onto a specialist advisory firm should the client want to explore further.”
The equity release landscape changed significantly following the arrival of pension freedoms on 6 April and the instigation of the first section of the Care Bill 2013. While these offer people new options in later life, it remains a challenge to save for retirement.
A change in rules by the FCA earlier this year has spurred on the equity release market, as affordability checks are no longer required for interest-charging lifetime mortgages that convert to roll-up mortgages.
The modification gets rid of the requirement to carry out an affordability assessment where interest payments are anticipated or required, as long as the consumer is able to move to an interest roll-up product at any time.
Estimates for the total level of equity in older people’s housing are as high as £1.4 trillion, according to figures from the 2011 census published by the National Office of Statistics.
Wilson added: “We strongly encourage more advisers to move into this market and we are prepared to support them. For example, we have made a significant investment in a new online portal helps to speed up lifetime mortgage applications, and we have also launched a new website designed to provide advisers with the tools and information they need to feel confident when talking about lifetime mortgages with their clients.”
Underlining the role equity release can play in freeing up assets locked into property, the lender highlighted the need for sensitivity and comprehensive relationship management when discussing personal illness and family issues.
The tendency for clients not to tell the truth about physical conditions makes it especially important for brokers advisers to handle customers with care and sensitivity, according to the lender.
Wilson concluded: “Advisers need to ensure they raise lifetime mortgages as an option at the pre, at, and in–retirement stages of any financial planning conversations. All retirement options need to be fully considered and financial planners need to advise on all aspects of retirement, from tax planning to lifestyle choices. We expect to see more residential mortgage and pension advisers enter this space in the coming years and we will gladly welcome them.”
More 2 life is a specialist lender focusing on the equity release market, and launched in 2008. Last year it launched a “Big Picture” campaign, aimed at reminding advisors of the importance of asking health questions when discussing lifetime mortgage solutions with clients.