It is “crucial” that advisers and the later life industry take a “more holistic” view of advice, according to More2life managing director, Ben Waugh.
Speaking at the Equity Release Council Summit today (May 23), Waugh explained that customer needs are changing in the current environment of lower rates and lower LTVs and so it is important the industry shifts to meet them.
He advised this could be done through a more holistic view of advice which may manifest itself in the adviser continuum starting to change.
“Where you have got advisers operating in a traditional mortgage market and advisers that are equity release specialists, that is going to start to blur,” he explained.
“This is because the planning for later life is going to start at a younger age.
“It has to change and, by advisers in the industry working together, that’s how we’re going to get those better customer outcomes that we want to achieve.”
Challenges
Waugh outlined some of the challenges facing the later life industry at the moment, such as the number of people retiring with an unpaid mortgage.
“Probably one in five customers are going to retire with a mortgage and with long term debt and, as we go forward, my suspicion is that percentage is going to go up and up and up,” he stated.
Waugh also identified the challenge of rising mortgage costs, stating that average payments have increased by “an eye-watering” 61 per cent since 2021, which he described as a “big challenge for borrowers”.
Lastly, Waugh discussed the fact that last year, 82 per cent of all remortgages were product transfers, meaning that customers stayed with their existing lender.
“Personally I believe that a lot of those customers sought advice from a mortgage broker and they said ‘there are better options out there but the problem you’ve got is you’re not gonna pass affordability’,” he explained.
“The advantage with a product switch is you don’t need to do affordability checks, so there’s a lot of kicking the can down the road going on.
“That just can’t be right for consumers in the long term. It’s a short term win, it’s not a long term fix and it’s not long term security for the customer.”
Waugh stated that, while this does represent a “huge challenge” to the industry, it is also a substantial opportunity “if we get this right as an industry” to drive much better customer outcomes.
tom.dunstan@ft.com
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