Between 2017/18 and 2019/20, there was a 47% increase in the number of introducers entering the market.
Key Partnerships attributes the small recent decline to the impact of coronavirus.
Mortgage brokers (56%) were the main driving force behind the introducer market, which Key Partnerships attributes to the wish to complement their standard and later life mortgage offerings by adding equity release as an option for clients.
However, the number of new independent financial advisers (IFAs) choosing to refer fell from 25% in 2019 to 13% in 2020, which may be attributed to the wish to focus on their core businesses during the pandemic.
Despite this, the proportion of wealth managers rose from 9% to 14% year-on-year.
When asked, these respondents said they had decided to refer equity release cases rather than transact the business themselves; 26% said that their network or head office prefers them to refer to a specialist and 24% said they saw this as a specialist area themselves so chose to refer.
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.
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, and nearly £10,000 higher than in 2019.
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.
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.
“Mortgage brokers remain the most common referral partner as they look to add equity release to the range of later life lending options they can provide.
“IFAs and wealth managers also commonly refer customers although we have seen a drop off in the number of new IFAs who are looking at this market as they focus on their core areas during this challenging time.
“Finally, it is 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.”
