Less than half of advisers feel fully confident they are meeting Consumer Duty obligations in the later life lending market, according to research from Key Later Life Finance.
The study, which surveyed over-50s specialists, wealth advisers and general financial advisers, found that just 45% were ‘very confident’ they are currently fulfilling Consumer Duty responsibilities when advising on later life lending products.
A further 41% were ‘quite confident’ but acknowledged room for improvement, while 16% admitted to being only ‘slightly confident’ and in need of change.
Despite strong growth potential in the sector, three-quarters (74%) of those surveyed said they were concerned about meeting Consumer Duty and broader regulatory requirements.
Key Later Life Finance emphasised the need for advisers to present all later life lending options to clients over 50 to ensure good outcomes.
The firm called for the Equity Release Council (ERC) to introduce a new standard mandating call recordings of all meetings with over-50s clients.
Key said such recordings should be considered good practice across the market to evidence that a full range of options has been clearly explained and explored.
One in three advisers (32%) had already introduced mandatory call recording as part of their quality assurance process.
Meanwhile, 36% said they now provide more detailed explanations around compound interest, and 37% are more explicit in discussing the benefits of making repayments to manage borrowing costs.
Will Hale, CEO at Key Advice, said: “Clients should be advised of all their options under Consumer Duty if good customer outcomes are to be achieved.
“Advisers who are concerned about meeting Consumer Duty obligations should be aware that there is support available to enable them to be fully compliant.”
He added: “Regulators have set out what is needed from advisers operating in the market and Consumer Duty obligations have emphasised the need to deliver good customer outcomes through ensuring that clients are informed of all their options.
“Comprehensive conversations around what a customer may afford to repay to optimise cost of borrowing and how health and lifestyle factors may positively influence the rate or LTV available are crucial if consistently good outcomes are to be achieved.”
Hale also encouraged wider adoption of call recording, adding: “Modern technology allows this to be unobtrusive and recording calls is an efficient way of clearly evidencing a consideration of all options. It can protect both advisers and their customers from future issues.
“Also, recording all meetings opens up other exciting opportunities to use AI to drive efficiency and productivity benefits and to improve customer experience.”
