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Over two thirds of Equity Release Customers Start with Research Before Advice

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  • Just one in seven (14%) customers went directly to an adviser for a consultation before conducting any research of their own
  • Damaged inheritance, risk of losing home and passing on debt among leading equity release concerns
  • Nearly all (97%) homeowners that have spoken with an adviser say they feel confident about equity release

3rd August 2022:  Far from being a knee-jerk decision, new research from Standard Life Home Finance reveals that over two-thirds (70%) of equity release customers do their own research before speaking to an adviser about their later life lending options.

Customers Start the Journey with Independent Research:

This research, which forms part of the lender’s Lightbulb Moments survey which collated the views of more than 500 over-55 homeowners who had considered equity release, highlights not only the decision-making process but also the misconceptions that advisers need to address as part of the advice process.

Nearly three-quarters (70%) of respondents said they carried out their own online research to help them better understand what equity release options were available, while a third (34%) relied on information from families and friends, and slightly more (35%) requested guides from various companies. Just one in seven (14%) went to see a financial adviser without gathering any information ahead of time.

Advisers Provide Valuable Reassurance and Information:

While informed customers are engaged customers and independent research does highlight the benefits of these products, it can highlight misconceptions or exacerbate concerns that modern lending features can manage.

Asked about their views ahead of speaking to an adviser, almost half of clients (40%) said while equity release isn’t right for everyone, it can help some people, while a further 30% felt it was a good way of accessing some of the equity tied up in your home. 

However, 22% worried it could impact or stop them leaving an inheritance, while 15% were concerned they could owe more than the value of their home.  Almost one in ten (8%) worried they could pass the debt on to their families.

 

Perceptions of Equity Release Prior to Speaking to an Adviser %
It isn’t right for everyone but can help some people 40%
It is a good way of accessing some of the equity tied up in your home 30%
Interest can build up and you can owe a lot more than you borrowed 29%
It was a product of last resort, but more people are using it now 28%
It can impact or stop you leaving an inheritance 22%
I could end up owning more than the value of my home 15%
I could pass the debt on to my family 8%

 

Managing concerns and setting right any misconceptions are a key part of an adviser’s role as they work to ensure that customers make informed decisions which are right for their individual circumstances.  After speaking with a financial adviser nearly all (97%) respondents said they felt they understood equity release.

Six in ten (61%) people felt relieved after their consultation as it gave them a clearer idea of what their options were, meanwhile, 58% said they felt optimistic for the same reason.

Kay Westgarth, Head of Sales at Standard Life Home Finance, said:

“With increasing numbers of people considering equity release, it is great to see that many are keen to develop an understanding of their options before speaking to an adviser.  Specialist advice is vital to help people to make the right choices for their individual circumstances now and in the future, but an informed customer is an engaged customer who has genuinely started to think carefully about their options.

“That said, certain misconceptions and concerns can arise when information-gathering or conducting independent research, which may need the support of a specialist to unpick. For example, equity release products have evolved and developed significantly over the last five years and many people may not realise that those who take out a product with Standard Life Home Finance receive downsizing protection as standard.

“Simply highlighting product features – such as the no negative equity guarantee, the ability to make interest payments and the availability of inheritance protection – can set many customers’ minds at rest.  The difference in customer attitudes before and after having a consultation with a financial adviser clearly shows the true value of advice.”

For more information please visit: https://www.standardlife.co.uk/equity-release

 

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