Stuart Wilson is CEO of Air Group
'Expect the unexpected’ is a mantra you tend to hear a lot in business, along with the phrase, ‘fail to prepare, prepare to fail’.
These clichés are trotted out regularly and while I suppose there’s an element of truth to them, they don’t really cut the mustard when you come across a truly unexpected event, or a situation which seems impossible to prepare for.
Market downturns are a natural part of our existence in financial services, particularly in the housing and mortgage markets. Those of us who are long enough in the tooth are acutely aware of this, and it therefore pays to be ready for the next hit.
That said, few would have kicked off 2020 anticipating anything like the situation we now find ourselves in.
Even those who follow world events closely might not have been truly aware of what an outbreak of a particular virus in Wuhan, China would eventually mean first globally, and then specifically in terms of the health of our nation and our economy.
For those who did anticipate what followed, I salute you for being far and away ahead of the curve on this one. Yet I suspect whatever you did to prepare, apart from perhaps ensuring that your business had as much cash in reserve as possible, would never have 100% protected you against the lockdown, what it has meant for our sector and our ability to provide advice, and the impact it would have on lenders and providers.
In that sense, we’ve had to be reactive to what has happened, and from an equity release sector point of view, I couldn’t be more proud of the efforts that have been made to keep business flowing, keep on advising clients and maintain the quality of advice standards that are required by our regulators and trade associations.
It was never going to be easy, particularly given the reliance on face-to-face advice with clients, not just from a financial perspective but also for ensuring independent legal advice.
To that end, the Equity Release Council (ERC) moved incredibly quickly to temporarily revise its rules about face-to-face meetings with solicitors, acknowledging that without a change there would be no hope of getting cases through. Our providers were also able to make some rapid changes to criteria requirements, perhaps most notably in the area of valuations, where the lockdown has – for the most part – put a temporary stop to physical valuations.
Normally, in-person valuations are a highly important part of the lending process, but we have now shifted to a situation where (at the time of writing) almost all equity release providers are accepting either desktop or semi-automated valuations.
That constitutes a major step change over the past few weeks, and is a rapidly introduced amendment from providers which will allow equity release business to continue to be written, rather than us looking down the barrel of a stalled marketplace throughout the entire, indefinite lockdown period.
It’s this ability to react quickly that is hopefully allowing advisers to continue working with clients, providing advice, and placing cases.
Communication across the piece has been absolutely key, whether it’s advisers continuing to converse regularly with their clients, organisations like ourselves offering information and support via our coronavirus hub and updating our sourcing system quickly, or providers similarly offering a range of resources, whether specifically work-related, or more general insights into how to work remotely during this period.
There’s also been a recognition of what advisers are currently going through in terms of potential cashflow issues, coupled with the continued need to have access to the best commercial terms and the very latest information.
We’ve been fortunate to work with two academy ambassador firms, Canada Life and more2life, which have agreed to cover the membership fees of all our advisory academy member firms during the lockdown period. While the cost of these fees is not going to make or break an advisory firm, it’s important we do all we can to help.
This is another example of equity release stakeholders all working together in order to keep activity levels up, and to ensure that consumers continue to have access to high quality advice in this area.
It’s impossible to predict what might happen next, but in our reactions to this crisis we can definitely ensure the best possible advice environment right now. We can also do whatever we can to get back to normality quicker, while providing advisers with everything they need to hit the ground running as soon as the lockdown is relaxed.
I think we all appreciate that this is going to be a longer haul than some might have initially anticipated, but the later life lending sector is showing resilience in the face of adversity, and we will continue to work together to support all stakeholders.