The FCA’s Targeted Support initiative misses out on the potential to include later life lending to help deliver good customer outcomes for over-55 homeowners, Key Partnerships says.
The referral arm of Key Group believes Targeted Support is a fantastic opportunity to close the UK’s advice gap by bridging the space between generic guidance and individualised advice.
But currently the “once in a generation change” does not include later life lending options despite many older customers who could benefit and may have substantial property wealth and little in the way of savings and investments.
It is urging firms which offer Targeted Support propositions to signpost customers into specialist advisers who can assess whether modern lifetime mortgages can form part of their financial planning and ensure good outcomes.
Key Partnerships highlights that homeowners aged 55-plus own more than £3.7 trillion of mortgage-free property wealth and says that should form part of holistic later life financial planning and advice. But consumer awareness of later life lending options remains poor meaning that it’s up to advisers to signpost to the relevant expert advisers
It is working with mainstream mortgage advisers and wealth managers to build understanding of the products available and to form referral relationships and believes targeted support should represent a route for many more customers to engage with the later life lending sector.
Damon O’Connell, Director at Key Partnerships, said:
“In order to ensure good outcomes for customers, the home has to be included in retirement planning conversations, but the scope of Targeted Support does not currently include later life lending options.
“However, firms that offer Targeted Support propositions should signpost customers to specialist advisers who can assess whether products such as modern lifetime mortgages can be used as part of retirement planning conversations.
“Later life lending products are increasingly relevant to all over-55s homeowners and can support needs such as more efficient management of existing debt, a boost to retirement income, home improvements to potentially make a property more suitable for later life living and eventually to perhaps help finance care provision in the home.”
The FCA has opened applications for Targeted Support permissions with firms able to apply via Connect. Banks, pension providers and other authorised financial firms can provide suggestions designed for groups of consumers with common characteristics.
Key Partnerships helps advisers and intermediaries refer clients for specialist equity release and later-life lending advice, paying the introducer a referral fee if the case completes. Advisers can register at www.keypartnerships.co.uk
