Thirty-eight per cent of advisers are "regularly turning away" potential new clients enquiring about later life lending options because they lack confidence in providing a suitable service, Key Later Life Finance has found.

The equity release adviser’s latest study with over-50s specialists, wealth advisers and general advisers revealed that 46% of them occasionally turn away clients because they doubt their ability to offer a later life lending service.

A further 16% said they never or rarely turn away clients.

Key said its study "underlines the need" for adviser firms to set up trusted referral relationships with specialists in later life lending if they do not want to participate directly in the market themselves.

It added that the "growing complexity" of later life lending products is making advice "more complex" for advisers and highlights the need for referral relationship reviews and making use of the tools and research available.

The research found that 86% of firms said they refer clients to later life lending or equity release specialists at least once a month, while 49% said they are "very confident" that their clients receive the highest quality advice when they are referred to a specialist.

Chief executive officer at Key Advice, Will Hale, said: "Help is on hand for advisers who want to work directly in the later life lending market through the sourcing and research tools available and with the professional development resources and support provided by lenders and through networks and mortgage clubs.

"Putting in place referral arrangements with trusted specialists is the best option for advisers who do not want to expand their proposition but still be able to ensure that all options are offered to clients. They need, however, to be very confident that the referral relationship will produce the best outcome for clients.

"Setting up referral arrangements can be equally important for equity release specialists who perhaps do not want to cover mainstream mortgage options or have customers who may benefit from expert pension, tax or long-term care advice. Referral relationships can ensure firms fulfil their obligations under Consumer Duty while also improving their service proposition and creating a new income stream."

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