Key Retirement Solutions is warning brokers that the equity release market is being hyped up beyond what it can actually deliver.
The company argues that equity release is being touted as “the next big thing” for brokers looking for additional income.
But KRS claims the costs involved in training as an authorised equity release adviser far outweighs the prospective profit margin.
Dean Mirfin, group director at KRS, says: “As much as we would like to believe it, this view that equity release is going to save a broker’s business is not real.
“We have got a clear focus which is to help brokers and clients with what the real opportunity is. This is about maximising the opportunity rather than spending money.”
KRS has a partnership proposition in place that allows brokers to refer equity release business online.
Brokers can then earn the referral commission without bearing the cost of compliance and training.
The company has already launched several dual branded micro-sites with networks including Intrinsic and Mortgage Support Network.
It also has referral partnerships with building societies, solicitors and charities.
But Georgina Smith, sales and marketing director at Stonehaven, disagrees with KRS’s warning. She says: “There is no reason to say that the equity release market will not grow significantly over the coming years.”
“With this in mind, advisers should enter the equity release market and the opportunity is in no way being over-hyped.
“Yes, there is an additional qual-ification needed and yes, you need to develop a bespoke fact-find and com-pliance regime. But done correctly equity release will deliver incre-mental profits at a time when they are most needed.”