Customer needs have forever changed, but Consumer Duty provides the catalyst for innovation, panellists from across the later life industry have agreed.
A roundtable session hosted by later life lending platform, Air, featured spokespeople from the Consumer Duty Alliance and Financial Vulnerability Taskforce, Key Group, Knight Frank, more2life and StepChange.
Customer needs have forever changed
Panellists agreed that the needs of customers were changing dramatically in 2024, as the culmination of a series of long term factors that are leading increasing numbers of over-50s to carry debt into retirement.
Later life advice in isolation is no longer suitable for these clients, the panel agreed, and a customer-first perspective that considers all lending products is becoming crucial.
Whilst specialisms amongst advisers allowed customers to receive the most expert advice possible, it was determined that referral pathways need to be improved to ensure that customers are moved to the correct adviser for their situation.
New payment term products and similar are creating a ‘hybridisation’ of the industry, whereby mainstream and later life lending form one continuous journey for a customer.
Consumer Duty provides the catalyst for innovation
When discussing how Consumer Duty affects these changing customer needs, the panel came to a consensus that the tenets underpinning the Consumer Duty – that the consumer makes an informed decision – also require the change to more comprehensive conversations.
With many consumers who would benefit from independent advice still yet to engage with the IFA market, the panel agreed that Consumer Duty is the first step in creating greater trust amongst consumers so they can access the holistic advice that is necessary to find the right product for ever-more complex needs.
More work is needed
The panel agreed that a number of developments needed to occur to unlock the full potential of the market for advisers and ensure that more consumers can access the comprehensive advice they may need.
Chief amongst these was continuing innovation from lenders in creating hybrid products, backed with the work of advice firms in creating confidence in, and appetite for, these products in the market. Technology and education will prove essential here, the panel said, with tech tools allowing advisers to spend more time talking to clients. Simultaneously, industry and CPD training will support advisers in knowing when a client is best referred, or when a non-product option is preferable.
Paul Glynn, CEO at Air, commented: “It’s refreshing to see so many industry experts committed to creating good outcomes for customers, with voices from advisers, lenders, industry bodies and funders all contributing to the conversation. Bringing some of these expert voices to the table to discuss the future of the advice process and the UK later life sector was a fantastic experience with some valuable results.
“We thank all of our panellists for contributing, and are already adapting our Comprehensive Conversations campaign to include new points raised in the discussion.”
