Equity release advisers still confident about the sector
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Hodge Lifetime has revealed its latest figures which show that IFAs advising on equity release remain confident about the sector, despite the recent withdrawal of some lenders and advisers from the market.
Of those surveyed, 83% of advisers said these withdrawals have not affected their confidence and neither has the earlier Which? report - with only 4% of advisers stating that Which? mystery shopping exercises are a concern when advising on equity release products.
While recent events have done little to shake advisers’ confidence, IFAs still believe that much can be done to increase the potential for the sector. When asked to list their continued concerns, 19% stated that negative reputation portrayed in the media remains a worry. This has been consistently ranked as the top IFA concern over the past year.
Endorsing this concern, the main catalyst for increasing the growth of the equity release sector was deemed to be positive, improved media coverage for the sector, 21%.
Unlike findings in the summer, only 58% of IFAs this autumn believe that equity release rates will increase marginally over the next three months, 79% summer 09. However, when looking towards the future, and increasing demand for equity release, advisers believe that there are several forms of product innovation which could help.
Some 37% think that an increase in products with no redemption penalties would be beneficial and 31% think that increasing loan to value would also increase the demand. A growing number of IFAs also supported an alternative option of partial interest repayment loans so that dependents can repay some of the loan to reduce the amount of interest roll up.
Considering their own businesses over the coming months, and increasing client numbers, 30% of IFAs plan to increase networking with local solicitors and mortgage advisers, 23% intend to obtain referrals from existing clients and 17% plan to undertake more direct marketing within their immediate local area.
Jon King, managing director at Hodge Lifetime, says: “It is encouraging to see that IFAs remain confident in both the future of the equity release sector and in the strength of their advice. While the sector has had to endure the withdrawal of advisers and product providers from the market, as we look towards 2010, advisers are forthcoming with their ideas for product innovation and new offerings which could further fuel demand in the sector.”
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