Advisers admit there is room for improvement on meeting Consumer Duty obligations on the growing later life lending market, new research* from Key Later Life Finance, the UK’s leading equity release adviser, shows.
Its study with over-50s specialists, wealth advisers and general advisers found less than half (45%) are very confident they are currently meeting Consumer Duty obligations on later life lending.
More than two out of five (41%) say they are quite confident they are measuring up to Consumer Duty but admit there is room for improvement while a further 16% are only slightly confident and agree they need to improve.
Around three out of four (74%) admit they are concerned about meeting Consumer Duty and regulatory requirements despite believing the later life lending market has strong potential for growth, the research shows.
Key believes all advisers need to offer the full range of options to over-50s customers including later life lending products in order to ensure good customer outcomes. Key is calling for call recording for all meetings with over 50sclients and believes this should form part of Equity Release Council Standards and be considered good practice in all parts of the market in order that consideration of all these options can be clearly evidenced.
What advisers are doing
One in three (32%) advisers questioned say they have introduced mandatory call recording in order to improve their quality assurance processes for later life lending advice. In order to demonstrate appropriate consideration of all options, around 36% of advisers say they now provide more detailed explanation around compound interest while 37% are now more explicit around explaining the benefits of making some repayments.
Will Hale, CEO at Key Advice, said: “Clients should be advised of all their options under Consumer Duty if good customer outcomes are to be achieved. Advisers who are concerned about meeting Consumer Duty obligations should be aware that there is support available to enable them to be fully compliant.
“Regulators have set out what is needed from advisers operating in the market and Consumer Duty obligations have emphasised the need to deliver good customer outcomes through ensuring that clients are informed of all their options.
“Comprehensive conversations around what a customer may afford to repay to optimise cost of borrowing and or how health and lifestyle factors may positively influence the rate or LTV available are crucial if consistently good outcomes are to be achieved.
Furthermore, advisers should see call recording as their friend. Modern technology allows this to be unobtrusive and recording calls is an efficient way of clearly evidencing a consideration of all options and can protect both advisers and their customers from future issues. Also, recording all meetings opens-up other exciting opportunities to use AI to drive efficiency and productivity benefits and to improve customer experience.
