Later life lender launches advice support manifesto alongside AKG report
16 February 2020
More2life has launched a new manifesto aimed at helping advice firms produce better retirement outcomes for their clients.
The manifesto outlines how more2life will support advisers through technology, product breadth and adviser-focused support.
A separate AKG research paper, funded by the later life lender to gain an insight into the support required by advisers, found that over two thirds (67%) of advisers believe being able to offer a wider range of services to clients is the key advantage of advising on equity release. A further 42% said an additional revenue stream was the main benefit.
The data also showed that nearly half (46%) of advisers feel that equity release allows them to help customers that they would ordinarily not be able to support.
Asked how they plan to involve themselves in the equity release sector over the next 12 months, 47% said they already offered an equity release advice solution in-house, while just under one fifth deliver advice solutions via a referral service. More than half (55%) of advisers who already offer equity release expect this area of business to grow over the next three years, while 47% said clients are receptive to how equity release can benefit them.
Dave Harris, chief executive, more2life (pictured), said: “As the needs of retirees evolve and become even more complex, it is paramount that advisers are ready and able to cater for this growing demographic. However, we appreciate that the later life lending sector may seem like a step into the unknown for many advisers. It is for this reason that we’ve decided to launch our new manifesto which outlines how we plan to enhance our processes to help more advisers produce better retirement outcomes for their clients.”
A quarter of advisers surveyed said that online service delivery was a key requirement when looking to recommend an equity release lender to clients and more than double that number (54%) agreed that having a range of solutions and products was a key consideration.
Matt Ward, communications director, AKG, added: “ The research reveals positive signs and shows us that advisers see the ability to offer a wider range of services to clients, being able to help clients with issues they could not help with previously and the provision of an additional revenue stream for the adviser business as key primary benefits of offering equity release.
“A steady growth picture is predicted for equity release business, but the twin hurdles of historical perception of equity release and compliance concerns remain a deterrent to engagement for some advisers. All parties need to continue [to assess] how best to consider and address potential issues around client vulnerability and duress.”
The research also found that customers increasingly value the ability to make interest and capital repayments as products develop. Nearly two thirds (63%) of advisers said clients most value the ability to make capital repayments, while 58% of clients are interested in making interest payments.
Flexibility from drawdown products which enable customers to manage their property wealth was rated the most important aspect by 68% of advisers, while 72% say the ‘no negative equity guarantee’ on plans had the greatest appeal.
Pricing continued to lead the way when it came to selecting a lender, according to the research, with 71% of advisers picking on price, far above the 54% who said they select lenders based on their range of solutions and the 38% who chose LTVs and financial strength.
However, the research also shed light on the need for greater advice and processes to provide reassurance to advice firms. Advisers said they would like to see more emphasis on education efforts by providers and established best practice on compliance and sales processes.
The AKG report can be downloaded from the AKG website.
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