Regulator needs to get "joined up on property wealth," says equity release adviser
Key Later Life Finance is calling on the Financial Conduct Authority (FCA) to expand its ongoing Advice Boundary Guide Review (ABGR) to cover later life lending, following remarks by the regulator’s chief executive that highlighted the importance of housing wealth in financial planning.
In a speech delivered at the JP Morgan Pensions and Savings Symposium and published last week, FCA chief executive Nikhil Rathi (pictured left) acknowledged the need for greater integration across financial services, stating that “fragmented journeys – treating pensions, mortgages, savings and housing wealth as entirely separate challenges – must become a thing of the past.” He added that keeping these areas in isolation would mean missing opportunities to improve consumer outcomes.
The equity release adviser welcomed the speech but argued that further steps were needed to ensure later life lending is given the same regulatory attention as pensions and investments.
“The FCA is recognising the important role of property wealth and the later life lending market and the speech by Nikhil Rathi is hugely encouraging,” said Will Hale (pictured right), chief executive of Key Advice. “His most important insight is that there is a need for joined up advice across the market, supporting the requirement for the consideration of all options.
“But so far, the scope of the AGBR work is limited to pensions and investments. That needs to be extended to include consideration of property as soon as possible.”
The FCA’s Advice Boundary Guide Review is part of a wider push to create a targeted support model that bridges the gap between regulated financial advice and generic guidance. Currently, however, its focus remains on pension and investment advice.
Hale noted the growing importance of housing wealth for older consumers and argued that, with the appropriate protections and product design, later life lending should play a more prominent role in financial planning.
“Rathi rightly observes that for many, their home is their biggest asset and suggests that with the right product design and consumer protections in place, later life lending could benefit more people, as part of an individual’s financial plan, rather than a last resort,” he said.
Hale also stressed the need for policy changes to break down advice silos and make it easier for consumers to access and understand their financial options.
“It’s welcome rhetoric and all the points mirror those that the later life lending sector has been making for some time,” he said. “But more pragmatic action is required to remove advice silos, to grow people’s awareness of the options available to them and to reduce the costs involved in acquiring and serving customers so outcomes can be improved.”
According to Hale, unlocking the equity in homes could help address retirement income challenges and support intergenerational wealth transfer, aligning with broader government economic goals. He called on advisers across the financial spectrum – including mainstream mortgage brokers, IFAs, and later life specialists – to collaborate more closely.
“While we wait for the regulator and other policymakers to make improvements to the ecosystem within which intermediaries and lenders operate, market participants must take responsibility for addressing current challenges and seizing the opportunity here and now,” he said.
“It is important that mainstream mortgage advisers, generalist IFAs/wealth managers and later life specialists work in close collaboration so that older homeowners are made aware of all their options and achieve consistently good outcomes.”
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