Equity release referral market robust despite covid

06 January 2021 - 08:40 AM

Download the full report here

Despite Covid-19, the equity release referrals market remains robust only recording a 1% YOY fall in the number of new introducers signing up each month - with mortgage intermediaries now accounting for over half of the market (56%).  This new data was outlined in the second ‘Introducing the Introducers’ Report from Key Partnerships, the equity release referral service arm at Key Group, the UK’s leading retirement finances firm.
Continued Interest Driven by Mortgage Brokers Diversifying:
Between 2017/2018 and 2019/2020, we saw a 47% increase in the number of introducers entering the market but this slowed as the impact of the pandemic hit.  In 2020, we saw 1% fewer introducers signing up on a monthly basis when compared to 2019.
Mortgage brokers (56%) were the main driving force behind the introducer market as they sought to complement their standard and later life mortgage offering by adding equity release as an option for clients.   However, the number of new IFA’s choosing to refer fell sharply from 25% (2020) to 13% (2019) as they focused on their core businesses during the pandemic.
That said, the proportion of Wealth Managers rose from 9% to 14% as they looked to offer clients additional borrowing options to mitigate issues such as IHT.  It is also interesting to note that an increasing number of equity release advisers are now referring cases, potentially due to the impact of the pandemic on customer interest or pandemic staffing challenges.
Type of new introducer 2019 2020
Mortgage Broker 55% 56%
Independent Financial Adviser (IFA) 25% 13%
Wealth Manager 9% 14%
Equity Release Advisers <1% 6%
Building Societies 1% 2%
Estate Agents 4% 1%
Other inc. Accountants, Law Firms and Care Firms 5% 8%
Referral’s Driven by the Specialist Nature of the Products and Client Demand:
When asked why, they had decided to refer equity release cases rather than transact the business themselves, 26% (26% - 2019) said that their network or head office prefers them to refer to a specialist and 24% said they saw this as a specialist area themselves so chose to refer (21% -2019).  The needs of clients were also an important factor and 26% said that they chose to refer as a client had asked and they wanted to support them (19% - 2019).
Intermediated Clients Wealthier and Release More:
The average amount released by referral customers in the first nine months of the year was £85,099 – around £2,000 higher than the market as a whole (£83,074) – and nearly £10,000 higher than 2019 (£75,631). 
The biggest increases came from clients of mortgage brokers who released an average of 44% more than in 2019 at £111,780 compared with £77,585 while clients of wealth managers released the most on average at £154,096.
Jason Ruse, Business Development Director at Key Partnerships said: “While it is almost impossible to talk about the later life lending market in 2020 without referencing the pandemic, it is good to see that the referral market has been remarkably robust.  We have only seen a 1% drop in the number of new introducers signing up on a monthly basis as they seek to provide safe access to this specialist market for interested customers.
“Mortgage brokers remain the most common referral partner as they look to add equity release to the range of later life lending options they can provide.  IFAs and wealth managers also commonly refer customers although we have seen a drop off in the number of new IFAs who are looking at this market as they focus on their core areas during this challenging time.
“Finally, it is interesting to note that half of introducers felt that they or the networks they work for viewed equity release as a specialist product requiring specialist advice from a highly qualified expert.  Often driven by customer demand, they wanted to support their customers with their needs in such a way that they felt comfortable that they were receiving the support they needed.  This bodes well for the industry as it continues to develop and we welcome more referral partners into the market.”
- ENDS –
Notes to Editors
The report is based on research among more than 500 introducers conducted in October 2020 and May/June 2019.  In addition, more than 7,000 introducer records were analysed to determine type, average case size etc.
For more information, please contact:
Lee Blackwell
Director of Public Relations and Public Affairs
Key Group
E-mail: [email protected]
Rachel Mann
Key Group
01772 269363
E-mail: [email protected]
Citigate Dewe Rogerson
Alannah Sims
0207 025 6563
E-mail: [email protected]
Notes to Editors
Key Partnerships
Part of Key Group, Key Partnerships provides an equity release referral service through The Equity Release Experts which is the whole of market division of the UK’s largest independent equity release broker – Key. As the consumer appetite for equity release continues to grow, Key Partnerships offers a way for its partners which include mortgage brokers, wealth managers, estate agents and solicitors to safely recommend clients to expert advisers. Key Partnerships focuses on tailoring its service to meet the needs of its partners and their clients – helping to ensure that if a business doesn’t have the tools, permissions or time, they can still service their clients.
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