Future-Proofing Your Mortgage Business: Why Later Life Lending Can No Longer Be Ignored
The mortgage market is changing and advisers who want to future proof their businesses, must adapt to the needs of older clients. Recent research by Key Retirement highlights a clear message: mortgage advisers must broaden their proposition to meet the evolving needs of an ageing population.
The Regulatory Wake-Up Call
The Financial Conduct Authority’s recent Mortgage Discussion Paper titled ‘Mortgage Rule Review: The Future of the Mortgage Market’, aims to initiate a public dialogue on reforming the UK’s mortgage regulations. The paper puts a spotlight on the challenges facing older borrowers, warning that many are unaware of the full range of borrowing options available to them as they approach and enter retirement. More critically, the paper suggests older customers could benefit from “more effective, holistic advice” to navigate this landscape.
The statistics from multiple sources speak volumes, with 38% of working-age people under-saving for retirement. This is a real driver for considering housing wealth (e.g., equity release, later life lending) as a potential supplement to retirement income. Additionally, 22% feel unprepared for retirement because they don’t understand their options.
The lack of understanding among consumers is also discussed, particularly around mortgage options in later life. The FCA emphasises the need for better communication and innovation to improve product transparency. Yet, property wealth, a crucial pillar in many people’s financial futures, remains underutilised due to limited access to later life lending solutions.
Why It’s Time to Rethink Your Approach
The discussion paper also notes that 97% of new mortgage sales since 2015 have been advised, meaning most older borrowers already have a relationship with a mortgage broker. This presents a huge opportunity for mortgage advisers and brokers. With the right product range and advice model, advisers can re-engage existing clients, meet Consumer Duty obligations, and unlock significant revenue – all without investing heavily in new client acquisition.
This all underscores the importance of shifting your focus. Advisers who expand their offering to include later life lending products can:
- Better serve older clients with tailored solutions like equity release.
- Drive stronger customer outcomes aligned with Consumer Duty expectations.
- Enhance business performance by boosting income from existing relationships.
Later Life Lending: A Growing Opportunity for Advisers
Modern lifetime mortgages targeted at older borrowers, particularly those offering interest-servicing features, are becoming increasingly mainstream. Mortgage advisers should routinely consider these products, not only to promote positive customer outcomes but also to enhance business growth.
While many advisers may seek to enhance their advice propositions to better meet the needs of older clients, a well-functioning market also relies on robust triage processes and strong referral partnerships with later life lending specialists. These elements can help deliver improved outcomes for older borrowers, while also creating an environment in which advisers and advice businesses can thrive.
How a Trusted Referral Partner Can Help
If expanding your advisory permissions feels like a leap, you’re not alone. Many mainstream advisers may choose to refer older clients to a later life lending specialist for this reason. This route offers several advantages:
- Can generate additional revenue through referral fees.
- Meets your regulatory responsibilities under Consumer Duty by ensuring all options are explored.
- Maintains focus within your current scope while leveraging specialist expertise.
Now Is the Time to Act
At Key Partnerships, we’re here to help you explore your options, be your trusted partner for later life lending referrals, and ensure you’re ready for the future of mortgage advice.
Why not find out more here?
