Bridging the Confidence Gap in Later Life Lending: A Call to Action for Financial Advisers

In today’s rapidly evolving financial landscape, later life lending—including equity release and retirement mortgages—is becoming an increasingly important area of advice. Yet alarmingly, nearly two in five financial advisers are regularly turning away clients enquiring about these options due to a lack of confidence in their ability to provide suitable guidance.

Recent research conducted here at Key reveals that a further 46% of advisers occasionally turn away clients for the same reason, and only 16% say they rarely or never do so. This points to a significant gap between client needs and adviser readiness.

The Confidence Conundrum

Why are so many advisers hesitant to engage with later life lending? The answer lies in the growing complexity of later life lending products and the specialist knowledge required to deliver appropriate and compliant advice. As the range of later life lending options has diversified and regulatory requirements tightened, many advisers—especially those whose core business lies outside retirement planning—feel ill-equipped to navigate the intricacies.

This confidence gap is not just a business problem; it’s a consumer protection issue. Clients who are declined guidance or given suboptimal advice that doesn’t cover the full spectrum of available products risk missing out on valuable solutions that could significantly improve their financial wellbeing in retirement.

Advisers declining to engage with these clients entirely is not a sustainable solution, particularly given the growing role of property wealth in retirement planning.

The Strategic Value of Referrals

For advisers who don’t wish to advise directly on later life lending, there is a clear path forward: trusted referral relationships with a later life lending specialist. Our research shows that 86% of firms refer clients to later life lending or equity release specialists at least once a month. This practice ensures clients still receive access to suitable solutions while advisers remain compliant and focused on their core specialisms.

However, referral relationships must be more than transactional. Advisers must feel confident that their partners provide advice of the highest standard. Currently, only 49% of advisers are very confident in the quality of advice their clients receive through referrals. Another 33% are only somewhat confident, and 15% admit to low confidence—highlighting a need for deeper due diligence.

Putting in place referral arrangements with trusted specialists is the best option for advisers who do not want to expand their proposition but still want to ensure that all options are offered to clients. They need to be very confident that the referral relationship will produce the best outcome for clients.

Collaboration Is a Two-Way Street

Referral networks shouldn’t just benefit generalist advisers. Equity release and later life lending specialists also gain from building reciprocal partnerships. Older clients may need mainstream mortgage advice, long-term care planning, or pension and tax expertise—areas outside the typical remit of a later life lending expert. Collaborating with others helps meet clients’ full needs and enhances overall service.

Such partnerships also support firms in meeting their obligations under the Consumer Duty, by ensuring clients are presented with all relevant and appropriate options. Importantly, they can create new revenue opportunities for both parties, with minimal added risk.

A Duty to Serve an Ageing Population

With more clients relying on home equity to support retirement, later life lending is no longer a niche concern—it’s central to modern financial advice. Advisers must recognise that walking away from this conversation is walking away from a core part of client care.

The choice for advisers isn’t binary. They don’t have to become experts overnight. But they do have to ensure that they’re equipped to guide—either through specialist knowledge or through rigorous referral partnerships.

In doing so, they not only expand their service offering and safeguard their business but also help build a more inclusive, resilient financial advice ecosystem—one that supports clients at every stage of life.

Will Hale,
CEO of Key Advice and Key Partnerships