At a recent ‘Breakfast with Stuart’ event, the discussion turned to the extent to which advisers in our space should have knowledge beyond the later life market after I’d made the comment that advisers should “train on pensions”.
That was picked up by one of our attendees and I clarified that I wasn’t talking about later life advisers securing qualifications to advise on pensions – although if they wish to go down that route then good for them – but instead securing a base level of knowledge across a wide range of areas that are undoubtedly going to be relevant when talking to a later life client.
So, for instance – and this might be a contentious statement – but in my view advisers can’t truly be fully equipped within the later life space, and able to cover off all necessary bases, if they know nothing about pensions or estate planning or state benefits or lasting powers of attorney or social care.
The latter being a topic which is clearly front and centre at the moment given the recent government announcement.
However, as mentioned, that doesn’t mean having all the necessary permissions, authorisations and qualifications to advise in those areas, but it does mean being aware of what the client might have in terms of assets, what protections are in place, where the client might be heading, how other parts of the client’s financial life might be impacted by, for example, taking out an equity release product.
To my mind, it’s about identifying potential issues and problems in those areas, and ensuring your client gets specialist support and help – referred by you – to head those off at the pass. In that way, you’ll be far more certain that the consumer outcome you get to in the later life space is going to be positive.
Ignorance really is no excuse because, if your client feels somewhere down the line that you could have seen off any problems that have subsequently arisen, then this is not going to stand up as a defence to a potential complaint.
You’ll note that I’m consistently talking about ‘later life’ rather than just simply equity release here. Because this does tie in neatly with what we continue to say about the need for holistic advice within the later life space.
We recently conducted a census of over 400 advisers who are either active in, or want to be active in, the later life lending market.
The results of that census were very interesting because they outlined some of the key barriers faced by both advisers and clients when it comes to accessing the market, not least around the historical focus on a one single product solution, namely equity release.
It was clear from the feedback we received that playing in the equity release silo only doesn’t fully represent the sector at all, and there is a real need for a ‘rebrand’ around the lending options available.
Not least because they now extend far beyond lifetime mortgages, covering the emergence of both retirement interest-only mortgages and those mainstream products which have a much higher maximum age. And, we can be assured, that more products will follow that cater for this demographic which are not just equity release-based.
This ability for advisers to have a much wider later life lending product knowledge is of course inextricably linked to what we are saying about the need to have greater understanding of a later life client’s circumstances beyond their need for borrowing, because these have to viewed ‘in the whole’. How can we provide that sort of advice if our knowledge is lacking in these key areas? The answer is we can’t.
So, ultimately, even if advisers are ‘equity release specialists’ we have to move the conversation on to ‘later life lending’, and we have to incorporate much more into our client dealings so that we can unearth any potential issues that we may not be specialists in, but we can certainly identify by having that greater level of knowledge that is a real requirement of advising in this day and age.
Given the growing level of financial awareness, consumers are going to expect it, and advisers should want to deliver on it to get the best outcomes for all.
