When Key Retirement Solutions (KRS) launched in September 1998, it was entering into an underdeveloped sector with considerable baggage from the 1980’s and a focus on merely sustaining the market rather than growing it. There were very few providers and most IFAs were not that acquainted with the market.
Since then, the sector has changed considerably, driven by society and simple economics. Consumers are not only living longer but they are starting to realise that the pension provision they had made for themselves either was so damaged by stock market fluctuations to be rendered useless or simply wasn’t enough to begin with. As this realisation dawned, people increasingly turned to their single biggest asset – their home – for additional income in retirement.
Struggling
These factors have seen the equity release market expand considerably, with new providers and products arriving on what can sometimes seem like a daily basis. However, while certain sectors of the market seem to be expanding swiftly, the number of advisers qualified to provide advice on this sector has not and indeed observers could be excused for saying that they are ‘struggling to keep up’.
As one of the few specialist equity release advisers, KRS has grown with the sector and currently accounts for 31 per cent of all business transacted by IFAs in the market (value). KRS has developed a series of tools in order to provide a consistently high quality of advice.
The first – the factfinding process – has been developed alongside the market and has been structured in such as way that it is logical, user-friendly and easy to follow. In addition, because KRS continues to work in the market the process is constantly evolving to react to the demands of the sector and of the regulator, ensuring the advice process and ‘know your customer’ information is totally comprehensive.
In addition, due to our involvement and indeed investment in the market, we have had the luxury of developing an integrated research tool. This tool is aligned to meet the demands of new and existing products in the market. A product launch process also ensures that new schemes are not live until financial advisers complete knowledge tests and suitability issues are explored and tested.
Once the factfind and research has been done, it is essential to have a system that ensures the solution and process by which this solution is arrived at is correct. To this end, a full end-to-end system, which ensures the suitability report captures and integrates all core information from the fact find and the advice process, has been used within the company for several years now.
Improving the market
But why are we telling you this? After all, handing out company secrets isn’t necessarily the best way to do business. Well, over the years, we have had many requests from firms who wish to purchase these systems for use in their own companies. We have steadfastly refused until now. What then, is our motive for making systems available now as well as comprehensive training? Many may think it is purely about income. It is, of course, but in an indirect way.
Lifetime Advisory Services is not just about generating subscriptions. It is about making sure that this market survives – survives through the forthcoming realignment exercise. KRS does not want a greater share of the current equity release market. We want a share of a bigger, more buoyant market, which will only realise its full potential when clients and advisers feel secure within it.
Lifetime Advisory Services brings more than just the tools for the job. It brings comprehensive training and ensures that anyone who is able to wear the LAS brand has the relevant lifetime mortgages qualification. Subscribers will also be given commission rates equal or more than the highest in the market and exclusive deals from the major equity release product providers.
What do I believe this will bring to the market? Clearly, in the light of the recent Financial Services Authority (FSA) mystery shopping exercise, standards will have to improve and this proposition is for those who want those same high standards.
The additional benefits which should follow, with the increased confidence that the service will give advisors, is the ability to market an equity release proposition. In addition, our personal indemnity insurers are extremely happy to work with subscribers with a view to offering more favourable terms. They expect that many will see considerable savings on their insurance costs.
