Polarisation of advice could become an issue in later life lending

14 November 2018

A potential issue is developing as growing demand for later life lending advice outstrips the ability of advisers to give equal consideration to both equity release or RIO and other interest only products because of the limits on their current permissions, according to Aaron Conlon, Managing Director at Fluent Lifetime, the later life lending division of The Fluent Money Group.

He said, “Are the majority of advisers able to provide advice on equity release products on the one side, and RIOs on the other? I don’t think so. As a result the demand for later life guidance could create a bubble of questionable recommendations, which might well lead to regulatory issues and FOS claims, if advisers are proved not to be giving equal consideration to all the possibilities for a customer.”

He continued, “Advisers who are not qualified to discuss all approaches either need to qualify to do so as soon as possible, or make sure they are seeking help from an independent third party, like Fluent, who can provide the evidence on equity release and/or RIOs from which to make a reasoned recommendation. Alternatively, the adviser can refer their customer to us to provide all the advice and complete the whole process.

The danger of giving advice, but only being able to provide it where permissions are limited to one or the other, will come back to haunt advisers, their compliance departments and their insurers, if action is not taken very quickly. Demand for genuinely inclusive guidance is outstripping supply and as a result, customers could in the future find they have taken the wrong option and all because the adviser community is not yet suitably well qualified or fails to seek help and guidance on those parts of the later life lending sector for which they are not qualified.”