Paradigm believes that many advisory firms would benefit from offering a specific equity release advice service covering the full range of equity release products, both lifetime mortgages and home reversions.
It is concerned that clients who may be suitable for an equity release product are not being catered for due to a lack of specialist knowledge within firms or adviser misconceptions about the true nature of the products, their benefits and client responsibilities.
Paradigm is urging all advisers who may have clients appropriate for equity release products to ensure they have either in-house (or introductory relationships with) specialist equity release advisers who have the necessary qualifications and permissions to offer advice on both lifetime mortgage and home reversion product options.
The call for greater clarity of advice with regard to equity release products comes following the publication of the Dilnot Report into the funding of social care and the growing financial needs of those reaching retirement within the UK.
Paradigm believes there will be a growing market for equity release in the coming months and years, and it says adviser firms need to ensure they are ready, willing and able to service the expected increase in demand.
Paradigm is currently updating its range of provider and adviser relationships within the equity release space and expects to announce a range of new and enhanced strategic relationships with a variety of firms.
Bob Hunt, chief executive of Paradigm Mortgage Services, commented: “We have reached a crucial period in time in relation to the nationwide debate regarding provision for retirement and how, we as a nation, fund an ageing population both in terms of pensions, benefits and care.
“The Dilnot Report has certainly brought many issues to a head and it is vitally important that advisers are actively in discussion with all their clients about how they intend to fund their retirement and how they might also fund any of the care they need. How financial products fit within the expected changes to funding provision is still up for debate but it appears likely that many more individuals will be using their greatest asset, their home, in order to provide some of the funding they need.
“This will be something of a societal change away from the ‘home is my castle’ mentality however it is increasingly likely as many more people realise they have not set aside enough to cover lengthier periods in retirement.
“This is why we believe equity release will play a more important role in retirement living and therefore advisers across the country need to be prepared to see more clients for whom these products are suitable.
“We acknowledge that this sector requires specialist knowledge and those firms who do not have these skills should either move quickly to secure them or make sure they are introducing clients to those that do.
“It is also important that we recognise this is a two-product sector, covering not just lifetime mortgages but home reversions as well; it seems somehow wrong that advisers can still call themselves specialists in equity release when they are only offering advice on lifetime mortgages. Advisers need to give full consideration of the entire product range in order to provide their clients with a quality equity release advice service.”
