"Change such as embracing and gearing up to supply later life lending advice can be scary for both individuals and firm owners. "
Late last year we held a final Air Summit which contained insight from a whole range of market participants, not least advisers themselves, who will know better than most how the later life lending space has shifted, and why it is likely to grow in importance for them and their businesses in the future.
Moving into the later life lending market is often raised as a real opportunity for those who have yet to make this foray, not least because the fundamentals and the demographics of the UK housing market lend itself to a far greater need for advice in this area.
As our adviser participants talked about, they are now seeing a much broader spread of enquiries from a whole range of customers – from the more wealthy end of the scale who want to use later life lending as part of their estate planning to those who want to use their property as an income source, or to cover care costs, or to help out family members.
Plus of course we have a growing cohort of potential later life lending customers who might ordinarily not even believe they have access to these products. The 50-somethings who would otherwise be product transferred to another mainstream deal, but who – in the hands of an experienced adviser who can cover all options – might well have the needs and circumstances which suit them to the new breed of later life lending products.
That is a hugely important point for advisers as they weigh up their options for the 2025 and beyond. On the Summit episode we spoke to both experienced advisers in this space, and those who have only just begun dipping their toe into later life lending over the last 12 months or so.
What bonded both was a clear recognition that the market environment – and crucially – the regulatory situation had already shifted and a focus on delivering positive consumer outcomes, as part of Consumer Duty, required them to broaden their advice offering.
Now, of course, that is easier said than done, particularly for those who have only been active in the mainstream mortgage space for any length of time. As was pointed out, change such as embracing and gearing up to supply later life lending advice can be scary for both individuals and firm owners.
However, far better to be curious about what is achievable and what this might mean for the individual and the firm, than to be scared by it. Firms have the right to provide as broad or narrow a service offering as they wish and we are not trying to railroad firms into areas of the market where they are not confident of acting.
At the same time, there is not a journey which they need to go on alone. Far from it. Just via Air we offer a vast range of support services, resources, training and education that can make this journey as comfortable as possible. And, at every point, we are focused on showing why such a journey is right for both the firm itself, and of course, for the client.
Now for some firms it may simply not be possible to be able to provide advice across every single area of the market. It, as we have pointed out, may not even be desirable or cost-effective, and at this point it is going to be crucial that firms can collaborate with others who are in this space, that they can have confidence in the work of others, and they are clear on what they are being offered and what is being delivered to their clients.
Traditionally, there has been something of a suspicion amongst some firms about the motives and benefits of working with others, a tendency to think the client is at risk, however as we know, if you get the right partner then you can establish a lucrative arrangement that works for all.
The reason why this can be a good first step into other sectors is, of course, founded on the needs of customers, particularly as they age and they take mortgage debt later in life, by which we now mean into their 50s and beyond.
We asked advisers what they felt the market shift would be and one suggested that the days of the equity release-only adviser, only active in this space and no other, were effectively numbered.
A combination of shifting regulation and the need to be able to review a far greater degree of product options, from mainstream mortgages through RIOs and TIOs, to lifetime mortgages and all their variations, plus those product and criteria offerings which have not even been launched yet, would put paid to that.
However, this doesn’t mean the end of their business of course, it just requires a willingness to either move in those directions yourself, or to engage with others. If advisers/firms can get far better at collaboration in the year ahead and beyond, they are still in a very good place, not least because the demand for advice is only going to grow.
Overall, advisers retain a very strong position if they can adapt their propositions and offerings to the changing demands and circumstances of clients, and they can ensure they are the conduit to the ever-growing number of product solutions that have come to market, and will continue to come to market.
It is of course a challenge but the support and resource is readily available to them in order to benefit from a market which continues to move in their direction.
