Chris Prior is manager sales and distribution at Bridgewater Equity Release
For those of us of a certain age – I won’t divulge but let’s just say its North of 40 – there is a lot to be gained from taking comfort in the things we know.
This is not to say that we won’t try anything new or that we’re complete Luddites unwilling to see the benefits of today’s technology, or we sit at home bemoaning ‘progress’ and forever harking back to ‘the good old days’.
It simply means that seeing, for example, products/services/brands that are familiar and recognisable can provide a large degree of comfort and give us the confidence to part with our money in order to secure them.
Established businesses know this only too well which is why we constantly see brands using their ‘established date’ to sell us their wares.
I recently took a trip on the tube and on travelling up the escalator was treated to advert after advert from the same investment management business harping on about the length of time it has been in business as a good reason to use it.
The idea of course is that this business has been around for a long time, it has the experience and the expertise to have survived that long and therefore we can expect it to be there in X number of years rather than have gone into administration taking all our money with it.
When I look at the current state of the equity release market I am absolutely enthused by the progress it is making and fully expect it to continue the recent upward business volume trend.
However, I also believe there is significant room for improvement and we, as market stakeholders, would all benefit from the entry of brands who we might describe as established, well-known household names that would be immediately recognisable, trusted and therefore ‘acceptable’ to potential equity release customers.
It’s long been a ‘problem’ suggested by some commentators about the equity release market that given we don’t have, for example, the top six residential mortgage lenders also offering products in our sector we are missing out on those customers who would appreciate their familiarity.
Indeed, while the equity release provider specialists might be slightly discombobulated by any such entry, deep down I suspect they would appreciate the focus on the sector that a huge lending brand could bring.
Now the last thing I am wishing to do here is disparage those businesses who are already involved in equity release – there are clearly some very large operators amongst us such as big insurers, property companies and others.
However, given that the vast majority of products offered in equity release are lifetime mortgages customers might well expect to have some of the big mortgage brands active in the marketplace. That we don’t might make some customers prick up their ears and wonder why they are not offering products and whether therefore this should be a product they take out.
Most customers of course will trust the judgement of their adviser on this matter and if the recommendation is sound (why wouldn’t it be?) go ahead with the product anyway. However, certainly in terms of education and information, having major lending brands active would clearly have a positive impact.
This is why I was pleased to read about the Equity Release Council’s recent engagement with the Council of Mortgage Lenders principally to talk about mortgages into retirement but no doubt also covering off the equity release market and high-street lenders’ potential place in it.
Indeed, with the hugely significant pension announcement made in March’s Budget address there are clearly going to be a series of huge crossover issues to discuss and with these two bodies engaged perhaps we will finally have more joined-up thinking that can benefit all.
It may even lead to some lenders looking at their current offering and the potential demand for equity release and deciding this is a space worth being involved in. We shall wait and see however this is obviously a notable first step in bringing greater collaboration between the two sets of lenders/providers and one hopes there will be some tangible and positive results to report from these meetings in the future.
