In a new report Air is supporting advisers and clients with making confident and informed decisions on later life lending by helping advisers to model outcomes -including inheritance implications – so trade-offs are clear and documented.
The report with Technical Connection and Ad Lucem puts Consumer Duty at the heart of later life lending decisions outlining how adviser compliance is strengthened when they can demonstrate that the client’s relevant assets and options have been considered and advice has not simply defaulted to one option.
The market-leading later life lending platform’s report, The home belongs in the plan – Why later life lending is essential for client-centred advice, available to download at: https://homeintheplan.airlaterlife.co.uk/, outlines the trade-offs involved in later life lending and the clients it can help.
It addresses growing pressure on advisers from clients asking for support “now, not later” and equips advisers with a framework that supports advisers in evidencing and aligning decisions with Consumer Duty and strengthening documentation.
The report demonstrates that good financial planning is focused on sequencing assets and deciding which to use and why. However, it recognises that good advice is not delivered via a spreadsheet and outlines how key drivers for later life lending are often based on very personal needs or individual aspirations while stressing decisions have to be aligned with Consumer Duty and other regulatory considerations.
Care must be taken to ensure that borrowers and close family fully understand the implications of any planning involving the release of equity on a practical, human, legal and most importantly, financial basis. The interest rate and whether or how repayments are made are especially important when compounding of interest on the amount borrowed is central to the financial case.
However, modelling of options including pensions, investments, downsizing, and housing equity provides a consistent and auditable approach for advisers and clients. That is particularly important for aligning the views of families and ensuring fairness through clear communication.
Tony Wickenden, Founder and Managing Director of Technical Connection, said: “Later life lending isn’t for everyone, but for the right clients it can support outcomes like earlier family help, improved liquidity, or greater retirement resilience, when the trade-offs are understood and recorded.
“While the desire to achieve a specific outcome, such as helping with a property purchase, can be very strong, it is essential that all parties fully understand the longer-term financial implications.
“Later life lending can be a valuable planning tool when used deliberately with clear guardrails enabling advisers to deliver Consumer Duty-safe decision-making processes that families can understand and live with.”
Will Hale, CEO of Air, said: “Clients need advice that brings every part of their balance sheet into view, including the asset that represents a significant percentage of overall wealth for many, which is their home.
“At Air, our goal is to equip advisers with the insight and tools they need to establish productive referral relationships where appropriate and to deliver confident, client-centred advice in a fast-moving environment.”
Air is running a series of webinars, which include targeted sessions for IFAs, residential mortgage and wealth advisers as well as later life lending specialists, and advisers can sign up at https://airlaterlife.co.uk/events?category=Air%20Whitepaper
Air’s services include training on setting up referral pathways and business development, as well as support on qualifications. More information on Air is available from the website.
