Speaking at yesterday’s Financial Conduct Authority mortgage conference Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said mortgage advisers must think about how to provide holistic advice to clients nearing retirement or face dying out.
He called on the regulator to make sure that the interaction of pension, investment and decumulation advice with mortgage and equity release advice was investigated as part of the upcoming financial advice review.
He told delegates: “The advice review is the starting point for this debate. One of the biggest problems we face is clients walking into an adviser’s office and asking for help with their decumulation and the adviser only being able to advise on investments and pensions.
“But it may be that the majority of their wealth is tied up in their home and a lifetime mortgage should be considered as part of the mix.
“It doesn’t fit at the moment: decumulation sits in investment and equity release sits in mortgages. We need as an industry with the regulator to rethink the structure of the whole industry.”
Sinclair said the industry had its part to play and encouraged advisers to plan for the future now.
He added: “We have to invest in our future as an industry. My advice to intermediary firms is to think about the money you’re earning today, think about investing in technology, investing in more people and back office support that gives you a bigger and better business that is more professional.
“Because if you aren’t, you will not survive as the world changes. There is a growing expectation of more rounded advice around clients’ life decisions – not about the pigeon holes we as an industry operate in.”
Lynda Blackwell, mortgage sector manager at the FCA, agreed with Sinclair and said: “One of the key things for us to think about in the mortgage market is the need to consider pension advice and investment advice and be much more joined up in the approach that we take.
“It has been a very sector-based approach to date and we need to take the opportunity of the upcoming financial advice review to look at that.”
