Big banks eye equity release

In Retirement Services predicts that major high street equity release propositions are just around the corner and could pose a threat to brokers.

Daren Carter, managing director of IRS, says that within the next 12 months several high street banks will enter the equity release sector. And he warns that these new entrants could take business away from brokers.

Carter says: “A lot of firms are looking to get into equity release and the brand power that high street banks can wield is considerable.

“It’s inevitable that more of them will dip their toes into equity release – the fundamentals are there for it to be-come a massive market.”

The equity release provider, which caused controversy when it signed a sole deal to provide equity release advice and products to HSBC’s customers, is calling on brokers to train as advisers or consider referring business before the large lenders enter the fray.

Statistics from the Council of Mortgage Lenders show there are about 26 million homes in the UK but only ar-ound 17 million mortgages.

This indicates there could be up to 2trillion of business up for grabs in a sector that is relatively untapped.

Carter says: “As margins close elsewhere, brokers need to act if they want to be part of this growing industry.

“The referral model can help brokers test the waters. They can develop knowledge and a client base while ad-hering to Financial Service Authority guidelines.”

He adds: “The referred model exists now and could become a significant in-come stream.”