Air Mortgage Club Adviser Census says 'Re-education' key to removing barriers to later life lending growth

02 November 2021

Air Mortgage Club, the leading later life services platform, has today (3rd November 2021) issued further results from its ‘Later Life Lending Census’ of advisers either currently active, or wanting to operate, in the later life market.

The Census – of over 400 advisers – sought to gather the views of a wide range of stakeholders to understand what changes needed to be made to make the later life lending market more accessible for both advisers and consumers alike.

As a result, one of the three key messages it has concluded from the results is the need to ‘re-educate’ both advisers and consumers on what the later life lending market is, and what it can offer – busting some of the myths in the market.

While 94% of respondents said the concept of ‘later life lending’ meets a genuine customer need, there was concern about the lack of knowledge of what it is. Over two thirds (76%) said consumers have limited understanding of the market and 43% said the same was true of advisers.

The census revealed that with a lack of knowledge comes misconceptions about the product choices available. 71% of respondents believe consumers attach a negative image to equity release, while 68% feel most consumers see later life lending products as ‘a last resort’.

As a result, 56% of advisers said the most challenging part of the process with clients was ‘customer reassurance and managing misconceptions’, scoring above ‘meeting regulatory and compliance requirements’ (54%), ‘managing vulnerable customers’ (49%), and ‘customer acquisition’ (43%).

Air Group said there is good news in terms of the value customers place on certain equity release product features, which is the result of a concerted education campaign over many years. While 77% said a competitive interest rate was most valued, this was followed by the flexibility in how they receive the money (76%), the flexibility of repayments (71%), and the no negative equity guarantee (60%).

However, when advisers were asked what were the top three areas within the later life lending sector which required ‘innovation’, 74% said ‘consumer education’ and 28% said ‘CPD/adviser education’, with respondents wanting more information and help not only on how they could find the right product mix for clients, but also wanting the risks associated with these products explained in a more transparent way.

Stuart Wilson, CEO at Air Group which includes Air Mortgage Club, commented:

“The Later Life Lending Census has brought to light a number of key areas which we certainly need to tackle if we are to grow this market and make the most of the underlying fundamentals which should trigger demand.

“Anyone who has worked within the equity release market for any length of time, will know that one of the biggest challenges has been around consumer education about what the products can do and what they don’t do, the responsibilities that come with those products, and what they ultimately mean and require over the term of those products.

“Tackling misconceptions and misinformation has been a constant struggle – one which the Equity Release Council in particular has fought for many, many years. However, it’s clear that from both a consumer and (to a lesser extent) adviser viewpoint, this is a ‘battle’ that remains ongoing.

“If anything, with the growth in the number of later life lending options available, it’s one that requires even greater resources. There is a tendency to see later life lending only through the prism of equity release, when of course there are many more options available outside of just lifetime mortgages, plus the features of equity release products themselves offer much more flexibility than ever before.

“In a way we need to re-educate ourselves and consumers to look at later life lending holistically and to continue to tackle the mindset of those who believe the products available are limited and/or still those of yester-year.

“Air Mortgage Club will seek to provide advisers, their clients, and the wider market with access to support and information which should go a long way to ensuring we have a much more educated stakeholder group when it comes to the later life lending market and the solutions available.”