This is the verdict of Key Partnerships which revealed, before the pandemic hit at the start of the year, 2020 was on course for a bumper year when it came to the referrals market.

Indeed, between 2017/2018 and 2019/2020 Key saw a 47% increase in the number of introducers entering the market, according to the second ‘Introducing the Introducers’ Report. But this began to slow when Covid-19 struck.

It meant, in 2020, 1% fewer introducers signed up on a monthly basis compared to 2019 but it meant mortgage intermediaries now accounted for over half (56%) of the market.

While mortgage brokers were the main driving force behind the introducer market, as they sought to complement their standard and later life mortgage offering with equity release, the number of new independent financial advisers (IFAs) choosing to refer fell sharply from 25% (2020) to 13% (2019) as they focused on their core businesses during the pandemic.

Wealth managers signing up, however, increased from 9% to 14% as they looked to offer clients additional borrowing options to mitigate issues such as IHT.

Key also noticed an increasing number of equity release advisers were now referring cases, potentially due to the impact of the pandemic on customer interest or pandemic staffing challenges.

Jason Ruse, business development director at Key Partnerships said: “While it is almost impossible to talk about the later life lending market in 2020 without referencing the pandemic, it is good to see that the referral market has been remarkably robust.

“We have only seen a 1% drop in the number of new introducers signing up on a monthly basis as they seek to provide safe access to this specialist market for interested customers.”

When asked why, they had decided to refer equity release cases rather than transact the business themselves, 26% – the same as in 2019 – said their network or head office preferred them to pass on to a specialist. Meanwhile 24% said they saw this as a specialist area themselves so chose to refer (21% in 2019).

The needs of clients were also an important factor and 26% said that they chose to refer as a client had asked and they wanted to support them (this was 19% in 2019).

The average amount released by referral customers in the first nine months of the year was £85,099 – around £2,000 higher than the market as a whole (£83,074) – and nearly £10,000 higher than 2019 (£75,631).

The biggest increases came from clients of mortgage brokers who released an average of 44% more than in 2019 at £111,780 compared with £77,585 while clients of wealth managers released the most on average at £154,096.

Ruse added: “It’s interesting to note that half of introducers felt that they or the networks they work for viewed equity release as a specialist product requiring specialist advice from a highly qualified expert.

“Often driven by customer demand, they wanted to support their customers with their needs in such a way that they felt comfortable that they were receiving the support they needed.  This bodes well for the industry as it continues to develop and we welcome more referral partners into the market.”

New introducers (source: Key Partnerships)