Introducers expect an expansion of the equity release referral market over the next three to five years despite ongoing economic stresses, according to new research from Key Partnerships.

This division of the Key Group found that 58 per cent of introducers expect modest growth in this market over this period, with almost one in 10 forecasting ‘substantial’ growth.

However this figure was down from the 68 per cent cited in Key’s 2019 report into this sector, suggesting the impact of Covid-19 is tempering the optimism of some introducers. 

Within this market IFAs seem most optimistic about growth: with 9 per cent expecting substantial growth and 61 per cent forecasting moderate growth over this time period. 

Key Partnerships report also found that customers who were introduced via wealth managers, mortgage brokers and ‘general’ intermediaries typically released larger sums than the average equity release customer. 

Key’s data shows the average customer released £83,074 from their home with an average reserve amount of £85,529. 

However customers introduced via a mortgage broker released an average of £111,781 and had an average reserve of £142,730. For equity release deals introduced via a wealth manager the average amount released was £154,096, with an average reserve of £201,191. 

While most introducers saw the market growing the choice to introduce business to a specialist adviser remained the preferred route to market, with 70 per cent intending to maintain existing relationships with specialists rather than offering advice themselves. This figure has increased from 66 per cent in last year’s report. 

Over the same period the number of introducers planning to offer advice to all clients requiring it has halved from 7 per cent to 3 per cent.

Key Partnerships business development director Jason Ruse says he believes this shift in market views is partly down to introducers focusing on their core businesses in response to the Covid-19 pandemic impact on the economy.