Following lenders such as Just Retirement, Prudential and Bradford & Bingley moving to offer lifetime mortgages and home reversion plans direct to consumers, intermediaries have questioned the quality of advice being offered by tied direct agents.
Peter Wright, financial adviser at CBK, said: “The growth of retail financial services providers in the direct equity release channel is a worrying trend. It’s all about hitting targets and trying to sell to the masses. While regulation of the sector is good, the bar needs to be set much higher to ensure clients are given the best level of advice, and there are certainly questions over whether tied agents can do this if they are not searching the entire market.”
Lenders have cited a lack of equity release specialists as one of the reasons behind the move into developing a direct distribution channel. However, Peter Fisher, director at Nursing Home Fees Agency (NHFA), said greater attention should be placed on product solutions rather than targets.
He said: “Customers must be given best advice. It is true there is an insufficient number of specialist advisers in the market, but the burgeoning number of suppliers has led to over-supply and a static market. If a lender’s products aren’t selling, it’s probably because they have an inferior product compared to others, so that is what needs to be addressed. But offering this directly with nothing to draw comparisons with means there is a risk clients could get an inferior and unsuitable product.”
Duncan Young, managing director at provider Retirement Plus, said whole of market advice was crucial in the equity release sector and ruled out the launch of a direct distribution channel. He said: “We only deal with whole of market intermediaries as quality of advice is paramount to ensure clients are getting the best product for their needs.”
