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Consumers pivotal to equity release push

SIMON LITTLE, EQUITY RELEASE CONSULTANT, SLCONSULTING
SIMON LITTLE, EQUITY RELEASE CONSULTANT, SLCONSULTING

Despite the fact equity release as a product has been around for nearly 50 years, we still have a market which has yet to deliver sales worth getting out of bed for.

Even with all the enthusiasm and energy invested in it by numerous industry experts, equity release sales will struggle to hit £1bn this year.

If you talk about equity release to anyone, even consumer groups, they all agree it has to play a part in a growing number of baby boomers’ retirement plans. This is good news as next March is 65 years and nine months since the end of World War II, with the first wave of baby boomers hitting retirement.

So what does the industry need to do? I think that there are three areas of focus.

l Consumer engagement – I don’t just mean education, I’m talking about putting consumers in the driving seat right at the outset.

l Product development – are we as an industry properly addressing some of the barriers that put people off equity release? I believe inheritance is still a big barrier for many.

l Distribution – as with any financial services product, distribution is king. Equity release is more advice-driven than most products and the industry has to support financial advisers in this market if they are going to be encouraged to promote its benefits.

The industry is capable of making things happen, but only if it truly addresses these issues with imagination, while putting consumers centre stage.

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  • Simon Chalk 30th November 2010 at 9:04 am

    Simon is quite right in identifying the three main areas where much work is needed. Consumer engagement will come about by fostering media relations, promoting the beneficial aspects of equity release. Product development has slowed due to reduced provider appetite but several major players are now beginning to discuss new ideas with the adviser community. Last but not least; Distribution. This will be the single greatest cause (or failure) of growth. It will depend on FSA and IFA’s understanding that equity release is a later life planning tool and not a mortgage product. Simon Chalk, Later Life Planner, Later Living