According to the Equity Release Solicitors’ Alliance (ERSA), IFAs who take advantage of the opportunities that equity release provides for financial and legal advice at every stage of a client’s life could benefit from a valuable 20 year relationship.
The average age of the equity release customer is 67 which nowadays means that the length of the IFA relationship could last anything up to or over 20 years. When an equity release plan is taken out, it must be reviewed on a regular basis especially if this money is providing a constant income stream.
ERSA has done extensive research into equity release and the stages of advice necessary. They have identified a minimum four stages of advice that are required during the lifetime of an equity release product. By maintaining a dialogue with solicitors, IFAs can develop a lasting and rewarding relationship with a client.
At age 60 the IFA will possibly advise on the first equity release, review or prepare Wills, review future care fees planning and conduct a pension review. Expert legal advice is needed to ensure that clients are advised on the tax implications of gifting and Wills and care fees. At around age 70, the client may need to downsize or transfer the equity release product and release more funds and review his or her inheritance tax situation. Specialist lawyers can conduct an estate review and advise on Power of Attorney. By 75 a client will need to review pension provision and possibly register a POA. By the age of 80, there may be care fees that have to be paid so the preservation of capital is very important. If applicable a lawyer will assist in the sale of the home.
Claire Barker, chairman of ERSA said: “Equity release products require regular reviews and customers in general need comprehensive appraisals of their financial situation. It is our view that those financial advisers who consider this and maintain a constructive dialogue with expert solicitors can develop a more diverse and productive business portfolio.”
