Nearly two in five advisers are regularly turning away new enquiries about later life lending due to a lack of confidence in their ability to provide suitable advice, according to new research from Key Later Life Finance.
The study, based on responses from over-50s specialists, wealth advisers and general mortgage advisers, found that 38% of firms frequently decline potential clients in this area. A further 46% said they occasionally turn clients away. Just 16% of respondents reported rarely or never refusing later life lending enquiries.
Key said the findings underscore the need for advisers who do not wish to operate in the market directly to establish robust referral relationships with trusted specialists. The growing complexity of later life lending products, particularly equity release and hybrid lifetime mortgages, means advice is increasingly nuanced, the firm warned.
Despite the high rate of advisers turning clients away, the survey also found that 86% of respondents refer clients to later life lending or equity release specialists at least once a month. However, only 49% of firms said they were “very confident” in the advice those clients receive, with 33% feeling “quite confident” and 15% stating they are only “a little confident” in their referral relationships.
Will Hale, CEO of Key Advice, said: “Help is on hand for advisers who want to work directly in the later life lending market through the sourcing and research tools available and with the professional development resources and support provided by lenders and through networks and mortgage clubs.
“Putting in place referral arrangements with trusted specialists is the best option for advisers who do not want to expand their proposition but still be able to ensure that all options are offered to clients. They need, however, to be very confident that the referral relationship will produce the best outcome for clients.
“Setting up referral arrangements can be equally important for equity release specialists who perhaps do not want to cover mainstream mortgage options or have customers who may benefit from expert pension, tax or long-term care advice. Referral relationships can ensure firms fulfil their obligations under Consumer Duty while also improving their service proposition and creating a new income stream.”
