Equity release advisers wary of rent-back sector
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Equity release advisers appear to be taking a cautious approach to the sale-and-rent-back market, with some advisers reluctant to recommend rent-back even where it is suitable.
Research from Bridgewater Equity Release, carried out by Northumbria University, looked at equity release advisers’ attitudes to rent-back ahead of the sector being fully regulated on June 30.
Out of the 131 respondents only 16% had a client who had entered into a rent-back plan, while 34% had seen clients over the last 12 months for whom rent-back would have been suitable.
Some 24% are either ’likely’ or ’very likely’ to advise on rent-back under full regulation.
But a further 38% said they would be likely to advise on the sector if a widely recognised financial services provider entered the market first.
Peter Welch, head of sales and distribution at Bridgewater, says: “Clearly, advisers are only seeing a small number of clients who are potentially suitable for such plans.
“This may suggest that, for most individuals, rent-back is regarded as a product of last resort.”
He adds: “It would also seem that many more advisers would consider entering or continuing in the sector if a more widely-known provider was active in the marketplace but this is only likely to happen if the market size is attractive and distribution as always is key.
“The current providers have work to do to gain advisers’ trust and it will be interesting to see how the full regulatory regime impacts going forward.”
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