While the equity release market contracted during 2009 following product provider withdrawal, property price decline and funding difficulties, clients’ perception of products improved. Around 48% of Hodge Lifetime customers at the end of 2009 chose equity release predominantly for the peace of mind it offers (32% in Q4 2008).
As equity release in 2010 becomes more than just a form of financial security and a means for a comfortable existence, the role of advice remains key, according to Hodge. Among customers surveyed at the end of Q4 2009, advisers accounted for 40% of all equity release introductions, a year on year increase of 8% (Q4 2008: 32%) and the information provided was ranked of higher importance than amount of fees payable when making eventual plan choices (40% Q4 09, 30% Q4 08).
Jon King, managing director of Hodge Lifetime, commented; “There is no denying that the equity release market has taken its fair share of blows during 2009 and the withdrawal of large product providers has altered choice for customers. However, the importance of advice will never be removed and must remain the keystone for the industry going forward.
“Equity release awareness has grown and appreciation of its benefits is becoming more widely accepted by customers and the media alike. However, if this is to continue, advisers who are yet to explore this arena should make 2010 the year they choose to do so.”