Advisers boost equity release awareness

In its quarterly customer questionnaire, Hodge found that in Q1 2009 advisers accounted for 34% of all equity release introductions among customers surveyed, a year on year increase of 13% (Q1 2008: 21%). Introductions generated from newspaper editorial and press advertising fell considerably (editorial: Q1 09 – 11%, Q1 08 – 22%; press advertising: Q1 09 – 15%, Q1 08 – 23%). Intermediaries also played a significant role in determining customers’ final plan choice, with 77% of respondents taking out the plan recommended by their IFA.

Wider industry figures highlight the growing majority of equity release plans sold through intermediaries (SHIP Q1 09: 65%). This, compared to a decreasing number of mortgages sold via mainstream intermediaries (from 77% in Q1 2008 to 62% in Q1 2009), demonstrates the growing role IFAs and advice now play in developing the equity release market according to Hodge.

However, for the importance of IFAs to continue to grow, the additional layers of guarantees that they can ensure for their customers is paramount. Alongside the protection offered by SHIP plans, an IFA in today’s market who has considered the impact of redemption penalties, the need for a guaranteed cash facility and rates for life can provide advice to older homeowners that encompasses these guarantees.

Jon King, managing director of Hodge Lifetime, commented: “The increase of introductions to equity release via advisers is great news for the intermediary market and shows that real opportunities are available for today’s IFA. The extra value IFAs bring is not just in their advice but also their product selection in response to consumer concerns.

“The current economy presents many challenges for today’s older homeowner and customers are becoming increasingly aware that intermediaries can offer the full range of products and ensure that their plan fully meets their needs. With a full understanding of the intricacies of equity release products on offer, IFAs in this field can ensure an additional layer of guarantees and peace of mind to older clients.”