Mortgage advisers need to adapt to the growing later life lending market if they want to keep their businesses successful, Key Later Life Finance said.
The company pointed to the recent Financial Conduct Authority (FCA) mortgage discussion paper, which called for advisers to update their services for older customers.
The FCA warned that older people may not know about all the options as they approach retirement and said older borrowers may need “more effective, holistic advice to overcome this lack of awareness”.
Research found that 38% of working-age people were under-saving for retirement and 22% felt unprepared because they did not understand their options.
Property wealth could be important for retirement planning, but customers were not getting the advice needed to access later life lending.
Key Later Life Finance urged mortgage advisers to focus more on older borrowers, who often already have a relationship with a mainstream broker.
The FCA’s recent paper, CP 25/11, found that since 2015, 97% of new mortgage sales were advised.
The company said advisers could benefit from re-engaging with existing customers and offering a wider range of products, which could improve outcomes for customers and increase adviser income without large marketing costs.
Key Later Life Finance also said referring older clients to a later life lending specialist could be a practical solution for mainstream advisers.
A referral partnership could bring in extra revenue and help meet Consumer Duty requirements to consider all options, without advisers having to expand their own services.
Will Hale (pictured), CEO at Key, said: “The message from the regulator is loud and clear, mortgage advice must embrace the needs of older borrowers.
“Entrenched silos in the intermediary ecosystem mean that many customers are not being offered access to potentially life-changing later life lending products.
“Products targeted at older borrowers, such as modern lifetime mortgages that include interest-servicing options, are increasingly mainstream and mortgage advisers should be routinely considering them, not only to ensure good outcomes but also to boost their businesses.”
Hale added: “Many mainstream advisers may want to develop their advice propositions to better serve their older customers.
“However, robust triage processes accompanied by referral partnerships with later life lending specialists can be part of the solution for a better functioning market that works in the interests of older borrowers delivering improved outcomes and an environment where advisers and advice businesses can thrive.
“Advisers must engage with the FCA discussion paper and make sure their voices are heard.”
He said: “Trade bodies also have a crucial role to play in representing the views of their members but they must be prepared to compromise and collaborate and be bold in landing a vision for the sector.
“We now have a moment in time opportunity to influence meaningful change and create a market that works effectively for all stakeholders.”
