All eyes are firmly on the end of July when Consumer Duty ushers in a new era for financial services.
At the heart of this is good outcomes for consumers. Everyone, no matter what age or background, deserves access to the products and services they need to manage their lives with confidence. I have a particular interest in the 50-90+ age group, as that is the demographic LiveMore serves. The number of people who come to us who say that no one wants to lend to them is unbelievable.
The question is, why not? If you can afford a mortgage or it’s demonstrably the best thing for your circumstances, so what if you’re 50 or in your 90s?
It’s a prime example of where Consumer Duty can and should change financial services for the better.
LiveMore is a new company, but our customers so far have been over the moon that a lender will fight their corner and go the extra mile to prove their affordability. It doesn’t matter if they are retired, semi-retired, approaching retirement or even have another 15 to 20 years until they intend to retire.
It really should not be that difficult for people aged 50-90+ to obtain a mortgage. Before deciding if someone can afford monthly payments, lenders should appreciate how incomes often get more diverse as people get older. And given that around three quarters of over 65s own their home outright in England and Wales, surely equity release is increasingly relevant as a solution.
This is one of the reasons why Consumer Duty is music to our ears. The days of turning 50 and suddenly getting shut out from mortgages are numbered.
FCA priority
The Financial Conduct Authority (FCA) is making Consumer Duty a priority with a reported 80 people already working on it. I am also pleased that the regulator is so focussed on later life lending. In March, it wrote to all CEOs highlighting this sector and in particular emphasising the need for holistic advice.
It’s also conducting an in-depth survey among some financial advisers to review retirement income advice. At an impressive 87 questions and 60 pages long, it’s pretty chunky – but it’s another indication that serious work is underway to improve outcomes in the sector.
Hoping for a fairer future
More people have mortgages going into retirement these days and we must recognise that it is increasingly important to have access to this option.
As lenders and intermediaries, we should be doing everything we can to provide consumers with the right products and services, reasonable prices and fair fees, ensuring they understand their options and offering them support. This is what underpins Consumer Duty.
I have a lot of faith in our sector – it’s full of fantastic people who care a lot about their customers. For the vast majority, great consumer outcomes are already the number one concern.
Consumer Duty will only emphasise this with time, driving out a few bad apples along the way.
Leon Diamond is CEO and founder of LiveMore
