the power hour
“EQUITY RELEASE SHOULD BE A NEEDS BASED PURCHASE WHERE SOMEONE NEEDS AN AMOUNT OF MONEY EITHER ON A REGULAR BASIS OR IN A LUMP SUM TO DEAL WITH A PARTICULAR SCENARIO. THE PRODUCTS OUT THERE DO ACHIEVE THAT. ”
VO: The marketing question is an interesting one especially having spoken to networks which encourage or discourage people from marketing equity release. My background is compliance and there’s an awful lot more you could do from an innovative marketing perspective than is being done because compliance departments at networks are being obstructive. That’s a challenging behaviour to break. RS: You’re absolutely right. It’s actually driven by a misplaced fear. Some 7,500 advisers are qualified to advise on equity release but far fewer practice. Why is there this disparity? DM: I think this ties back in to marketing equity release. Part of the problem is a lot of brokers and IFAs don’t really understand what the product can do for people despite having done the exam and knowing the theory. Equity release is a very emotional product and you as an
40 mortgage introducer MARCH 2011
adviser have to get emotional about it because if you don’t it’s very hard to sell. You don’t take out a loan for the sake
of it so neither would you equity release. Ultimately the client’s motivation for wanting to use the product may not become clear until you’ve been speaking to them for half an hour. It can be debt consolidation or money worries and people don’t like to talk about that. Until you get emotional with clients you don’t get to the point where you can have a serious conversation about equity release. VO: That’s interesting. We know about 50% of people on the application form tick the “other” box despite the adviser knowing what their reasons are. There’s an embarrassment factor there. DM: There’s a lot more work to be done by providers getting advisers to talk about equity release as a day to day subject. Until advisers are having that
conversation with consumers equity release isn’t going to be a day to day product. SL: This isn’t a straightforward market and I think post credit crunch when mortgages dried up a lot of advisers thought they’d diversify into equity release and then didn’t know what to do when the clients didn’t knock on their doors. The adviser has to go to the client in equity release. RS: I think there is some work still to be done between the industry and consumer representative bodies including Which?, Citizens Advice Bureau and the Consumer Finance Education Board - though I recognise that SHIP has done a lot of work already in this area. These are the three bodies which can ultimately generate consumer activity in the new regulatory world. I agree with Simon as well. Although we are already trying to educate advisers through events including Mortgage Business Expo last year, we do need to work more on the emotional engagement with clients. That’s a big challenge. AR: I think we are getting somewhere with the consumer bodies. There was a point where Which? was very anti anything equity release but we’re now at a point where they actually refer their clients for the service. Their mind set has changed greatly. We are trying to engage with CAB as
well. It’s an organisation run by volunteers who don’t always understand fully the equity release product and so they’re also part of the wider public who we have to educate about the product. We’re also
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