As the year draws to a close, it’s natural to look back on what has happened and to also take a long hard look at what is going to be required in the year ahead.
We held a recent Summit Dinner with representatives from a number of the industry’s major distributor, advisory, network firms, to discuss just that, and to in effect, set out what should happen next.
This was definitely not a wishlist, because wishes for the new year seem like an odd thing to concentrate on, especially as wishes are not going to get us to where we need to be, and are not going to deliver the right outcomes for customers.
So, instead of wishes, let’s focus instead on what we might all be able to tangibly deliver, from the individual adviser, to the firm, to the club or network, to the provider. To, dare I say it, the regulator.
Let’s work on what we might need to do to ensure the customer has access to all their available options via the adviser, and that the adviser is in the best position possible to be able to access those options, and deliver the recommendations that are the most suitable for that client.
Any look to the future has to be couched in the past. To that end, what I think the sector has been good at this year, is shifting the conversation or narrative away from a purely ‘equity release or lifetime mortgage’ one for homeowners over 55, to one that is much more about the wider variety of ‘later life lending’ products and options these clients might be suitable for.
Consumer Duty has played a major role in this, in terms of identifying that it shouldn’t simply be about rolling a client onto a product transfer (PT) mortgage if that’s not the most suitable option; neither should it be simply about opting for a traditional lifetime mortgage if they want to release equity, but can meet the affordability and have a willingness to pay some or all of the interest.
However, we still have that demarcation between mainstream advisers who might not have the authorisation or qualification to offer other later life lending products such as hybrid lifetime mortgages, and the specialist equity release or later life lending adviser who might only be advising within this space and not realising there might be a mainstream option that is more suitable.
Of course, this is a regulatory hangover as such, but the question of where we go next does lie in solving this issue.
Because what we must endeavour to do – as we have moved equity release into a more focused later life lending space – is now move later life lending into a much more general mortgage conversation.
By this I simply mean that when an over 50/55 homeowning client is seeking advice they are simply looking for their next mortgage. And whichever adviser they do go to see, they should feel absolutely confident that they are getting access to all the options that are available to them at that time – whether mainstream mortgage, or RIO, or lifetime mortgage, or hybrid, or what new product or criteria is available to them.
There is clearly a major role for all firms here, but significantly for the larger networks or clubs who might traditionally have opted not to offer, or allow, their member firms to work in this space. That has to change, and it’s clear from some of the conversations we’ve been having, that this is being changed.
Where as previously they might have viewed obstacles, now they are looking for solutions. Working with the likes of Air to provide their advisers with everything they need to be all things to all clients – whether that is training or sourcing or technology or club access to ensure they can offer all products.
Some of the biggest advisory firms in the country are pivoting to a point where their advisers have access to all this, and can be the one stop shop for clients. Delivering ‘mortgage advice’ in its fullest sense, rather than having to outline that they can’t recommend a certain product, even if that product might be the most suitable for them.
That is clearly an unsustainable position for advisers/firms/networks, etc, to be putting themselves in. Very few clients will have self-identified as needing a later life lending product; they will simply have self-identified their need and what they require. Their expectation going forward should be that their adviser, whoever they might be, is able to provide their next mortgage, which might just happen to be one of the products mentioned above.
Like a would-be first-time buyer who because of who they are/their situation, has access to a high LTV mortgage, or a guarantor mortgage, or a shared ownership mortgage, etc, our 50/55-plus clients should be able to access a much wider product range now and they simply go to their mortgage adviser to secure it.
This is all about being able to deliver the next mortgage for a client. The barriers can be overcome to be able to do this. The resource and support is readily available, and my feeling and belief is that soon it will be untenable to hold any other position.
Paul Glynn is CEO of Air
