There’s no doubt that the months ahead, particularly during Autumn this year, are going to be vital for mortgage advisers in terms of how they service existing clients, and the depth of potential business that is ‘up for grabs’, and indeed how 2024 might play out for firms.
According to recent research from TotallyMoney, more than 4,000 existing borrowers a day are coming to the end of their fixed-rate deals which clearly provides a well of business opportunity to draw from.
Not just in terms of remortgaging, but also perhaps to look closer at other wants and needs across different product areas, and to review whether a straight remortgage or product transfer is the right product particularly for those who also quality for other options, such as the over-50s with later life lending.
It’s still somewhat baffling to know there are thousands upon thousands of clients who have only ever taken transactional mortgage advice at various 2-, 3- or 5-year points, but who have never had any other financial product, service or solution need explored.
Or, perhaps more pertinently, have never had those other wants and needs discussed with them.
This clearly presents vast untapped potential within an existing client base, not just in ancillary areas such as protection or General Insurance (GI), for example, but also in terms of segueing into what may now be more appropriate products such as later life mortgages or equity release.
The importance of exploring these opportunities cannot be overstated, particularly as the population ages and the need for tailored financial solutions grows.
Air’s ‘Comprehensive Conversations’ campaign underscores this potential. It encourages advisers to engage in meaningful discussions with clients approaching, or already in, their later years, and what better moment to do this than when they are coming up to a remortgage ‘junction’.
These conversations can reveal opportunities for various financial products, including equity release, retirement interest-only (RIO) mortgages, and other mainstream mortgage options.
By taking the time to understand clients’ evolving needs, advisers can identify suitable later life lending solutions that might previously have been overlooked, or were simply not available at the last point of mortgage communication.
Statistics highlight the necessity of addressing this demographic’s needs. According to the Bank of England’s Q1 Mortgage Lenders and Administrators Statistics, around 450,000 over-65s in the UK are still paying off their homes.
This significant number illustrates the ongoing financial commitments of older homeowners and the need for products that can alleviate their financial burden. By focusing on this demographic, advisers can provide solutions that not only help clients manage their mortgage payments but also improve their overall financial wellbeing.
Now, of course, we are not saying the vast majority of those 4,000-plus existing mortgage borrowers who are coming to the end of their fixed-rate deals every day, are going to be suitable for a later life lending product; however, it is definitely going to be an option worth exploring for a sizeable number of the over-50s demographic, particularly those likely to be taking mortgage debt into later life or retirement.
We’ve discussed at length before the potential to look at options beyond the product transfer, specifically for those borrowers who might be looking for a longer-term solutions and potentially want to bring outgoings down, who can make interest payments for a length of time, or indeed all of the above.
Those options now currently available in the over-50s lending space are relevant, and at the very least, need to be known by advisers, so they can have a full conversation about them, and they can meet their Consumer Duty responsibilities in order to deliver a positive outcome.
Much like advisers can’t simply skirt over the other wants and needs of existing clients in areas like protection or GI, they have to actively discuss and explore later life lending options for those who qualify for them, particularly for those who might ordinarily only be able to access a PT from their existing lender, because they can’t meet the affordability criteria in order to move to a different provider.
Advisers who leverage their existing client base for later life lending opportunities can achieve significant business growth. By engaging clients in conversations about their long-term financial goals and needs, they can identify suitable products that address these goals.
This proactive approach not only enhances client satisfaction but also fosters long-term client loyalty and referrals.
Advisers should therefore not overlook the vast potential within their existing client base especially at a time when so many are coming up for renewal.
Many clients who have only ever taken transactional mortgage advice are prime candidates for later life lending products – explore the options available with them, and seek the support and help you need to run a strong later life lending proposition that meets those needs.
Paul Glynn is CEO of Air
