By Equity Release Guru
“There is a component of pride attached to having the ability to comprehend monetary problems, and it’s understandable that a lot of feel like they can do it alone. ”
When things are going well, in some cases you can miss issues staring you straight in the face. Equity release has been on an upward climb for several years now, and 2018 will definitely be another record-breaking 12 months.
The market appears to double in size every couple of years and significant high street lending institutions are lastly tossing their hats into the ring– so what’s the problem? Well, regardless of our own success within this little equity release echo chamber, our clients are still puzzled about the lifetime mortgage however, more worryingly, lots of are downright suspicious of advisers.
Inning accordance with recent research performed by Moneyfacts, as numerous as a quarter of over 55s surveyed stated they would not trust a consultant. This, rather certainly, is a serious problem. Nevertheless, the concern is magnified by the truth that some two-thirds of customers believe they have a clear understanding of equity release, and 40% think they might handle a lifetime home loan with no suggestions at all. In essence, there are large swathes of our possible clients who believe they do not require any advice whatsoever – however I fear most in fact do not comprehend contemporary equity release and if they did the trust would return.
The industry has changed dramatically in just the last couple of years – just look at the dramatic shift in appeal from lump sum to drawdown, in addition to various flexible options, for example– however would the man on the street know this? I would argue they would not. Expert, professional recommendations is still the best way for consumers to get the absolute best alternative. However we have to get this message across to our potential clients in a much clearer method.
It is constantly going to be challenging to alter people’s minds and tell them that they should listen before moving forward with things like equity release. There is a component of pride attached to being able to understand monetary problems, and it’s understandable that a lot of feel like they can do it alone. The difficulty, for that reason, is to not weaken people however rather continually help them comprehend our market and the ways it is altering.
Sadly, as our market progresses and modernises it can often feel like the only individuals who learn about these developments are those working within the marketplace. We need to therefore break down this barrier and make equity release a story in the mainstream not only focussed on how huge the market is becoming, however more on the fascinating and revolutionary products that are being introduced.
For instance, how frequently do you see equity release mentioned in the mainstream press? And how often is the story prefaced by a streamlined description of what a lifetime mortgage actually is? It would be unusual to read a story about traditional home mortgages starting with a description of how a home loan works, and yet this is the norm when equity release is talked about. The significance of this is that in reality most typical individuals, and undoubtedly some average mortgage advisors, are not clued up on our market. We will only get to a point where individuals actually comprehend equity release when the lifetime home loan becomes as readily comprehended as a typical home mortgage. And up until that point is reached recommendations stays necessary. Nevertheless the intricacies of a life time home mortgage together with the many choices will, in my viewpoint, imply suggestions is constantly essential.
Eventually, no matter the industry growing rapidly, brand-new lending institutions and products being introduced, and a basic favorable environment surrounding equity release, much of our customer base is on a completely different page. To genuinely tackle this problem we need to alter the narrative. We have to assist shift the focus from just how much business we are doing, and focus on the facts of modern equity release. Individuals have to know how our items have actually ended up being so much more flexible, protected and custom-made to our customers’ diverse needs. It is an excellent embarassment that individuals are distrusting of consultants, but the very best method to tackle this is to break down this communication barrier and spread understanding. This need to be a synergy between lenders, regulators and private advisers. And when the basic population are truly clued up on equity release the trust will ideally return.