1. Who are you and what do you do?
I’m managing partner of Equity Advice which is the leading service provider for brokers needing services related to equity release. Within the proposition we have Equity Release Club, the largest specialist club in this sector, which currently has 500 members who benefit from a range of market leading products, services and fees without having to pay for membership. We then have ‘ERC Assist’ for firms and individuals who need training, support, processes and tools to develop into this market. This is a monthly subscription only service and offers firms all the tools they need to operate in the equity release sector. Finally, we have Equity Advice Franchising that offers a complete nationally branded solution that includes PI, T&C, administration and lead development as well as a complete and comprehensive package of benefits.
2. What is your background and how long have you been working in the sector?
I first entered financial services in 1990 in direct sales for Sun Life of Canada and worked my way up to head the national tied agency division. In 2000 I left to launch my own firm specialising in referrals. Having built the business I sold it to the Inter Alliance group and became its Mortgage Development Director tasked with building a mortgage proposition in time for Mortgage Regulation in 2004. When they merged with Millfield I left and decided the equity release sector offered exciting challenges so I set up Equity Advice in late 2006.
3. David Blunkett has come out in favour of equity release recently. The sector has received poor publicity in the past what has changed about it to make it more favourable?
A number of factors have contributed to this latest comment. The great work done by SHIP has rebuilt faith and credibility with the products. Regulation has meant that brokers have adopted a more professional and skilled set of standards in how the products are sold and providers have evolved to develop products quickly. The other factor is the needs of the consumer. The reality at one end of the market is that many more pensioners are facing financial hardship and falling outside of the state benefits system. This will become even worse as there are more and more people of the 55+ age group. People are spending longer in retirement as life expectancy increases and want to live in comfort so more are using equity release to improve their quality of life.
4. How important do you think organisations like SHIP are in the world of mortgages?
SHIP has established the most important thing the sector needed and that is credibility. Moving forward it is changing its role in order to speak on behalf of the sector and hopefully to help gather momentum in promoting the positive benefits of the product in the right circumstances. Bodies that offer representation for members unite the voices and concerns as well as shaping needs and issues. So as an organisation it is vitally important.
4. What advice would you give to intermediaries looking to enter the market?
Find a ‘partner’ who will support and develop your needs. Question networks, service providers or other services to see if they have the experience and track record to give you the environment you need to build a successful business. If you do a factfind on your clients then you should also do a ‘factfind’ on your support partner.
5. What are you doing to help support brokers in the equity release market?
Our entire offering is built around support. Many brokers are new to this sector and have often been used to broking mortgages, but this sector is very different. Our online training site at www.equityreleasetraining.co.uk will help them pass the exams. From that point on we have an entire range of services that can be ‘tailor made’ to the brokers’ or firms’ needs, including training events, bulletins, support desks and guidance. We have a passion for the sector and for bringing in more specialists to help develop the market’s true potential.
6. What should brokers be doing to help themselves?
Firstly get the exams, they are relatively straightforward. Then check to see the attitude of networks and/or professional indemnity insurers. Planning is essential; evaluate how you are going to get your message across to potential customers and what levels of business you want to write. Make a conscious decision to do the job to the highest possible standard or refer it. This is not a sector you can do as an ‘afterthought’ but if planned correctly it can offer huge rewards to those who take it seriously.
7. How can brokers give their clients peace of mind regarding equity release given the poor publicity they have received in the past?
This is not a product that is ‘sold’. Clients need to be guided gently and professionally through all the alternatives. Recommending SHIP-approved products will address a number of these fears. Involve the family if the client wants to as that will help them make decisions with full support but sometimes they don’t want the family involved. It is important to remember who your client is and their needs.
8. Where do you think the equity release market will be in 2010?
The market will be drawn into the political arena in 2009 as a General Election approaches as both main political parties understand that there is a crisis looming with funding alternatives facing pensioners. Senior politicians are now making comment on equity release and government bodies are asking questions about choices that have to be made. There has to be changes made to the means tested benefits rules and provision for long term care is creating funding questions. So I fully expect that by 2010 the market will be over £3billion.