Expert reviews the importance of specialist advice for equity release
Doing your own research into finance solutions may seem sensible – why wouldn’t someone want to be as informed as they possibly could be?
But Kay Westgarth, director of sales at Standard Life Home Finance, is clear that specialist support can avoid misunderstanding later life lending options.
“While our Lightbulb research highlights that 70% of clients undertook their own research before speaking to an adviser about equity release, it also picked up misconceptions,” said Westgarth (pictured).
She explained that said that while 40% of those who participated in the firm’s research recognised that equity release might not be right for everyone, a further 30% believed the product to be a good way to access some of the equity tied up in their home.
However, Westgarth said 22% were concerned that equity release could impact or even stop them from leaving an inheritance, and 15% were worried that they may end up owing more than the value of their home. In addition, she said 8% were worried that they could pass the debt onto their families.
Without support from an adviser, said Westgarth, these misconceptions might lead to a person making less informed choices, which did not benefit them in the long or the short term, and could lead to unnecessary financial struggles.
She believed picking up these issues as part of the advice process was vital, as was the understanding that for some, equity release might be an emotional decision.
“More than one in four people who sat down with an adviser were worried they would be judged for their previous financial decisions, or were concerned an adviser would not be able to help,” Westgarth said.
Role of advice
Westgarth said while the true value of advice was a topic that has been extensively debated since before the introduction of the Retail Distribution Review, advisers in the later life lending market played a vital role.
“Advisers encourage people to consider all their options and fully understand the benefits, as well as the downsides, of any choice, ultimately putting their minds at ease,” Westgarth said.
Indeed, after speaking with a financial adviser, 97% of participants felt they had a better understanding of equity release than they did before, Westgarth said.
She added that 61% people felt relieved after their consultation, with a clearer idea of what their options were, with 58% feeling optimistic for the same reason.
“Our findings show just how important it is that consumers follow up their research by speaking to a specialist financial adviser, to gain clarity and a deeper understanding,” Westgarth reasoned.
Making sure these conversations were taking place from the outset, she said, would help to tackle the confusion that still existed around equity release.
However, more importantly, she believed it would ensure that a growing number of Britain’s over-55s made better informed choices about retirement.
How important do you believe advice in the specialist market is for helping customers avoid misconceptions? Let us know in the comment section below.
