The equity release sector is facing one of its most significant periods of transition to date. A new product environment and a reiteration of regulatory expectations have allowed for reassessment and evolution. But what caused these changes, and how can Air provide safer tracks to help deliver better customer outcomes?

A changing market, the FCA’s review and Consumer Duty

Last Autumn’s infamous mini-budget saw the introduction of higher rates and lower LTVs. Since then, the equity release sector has faced business model pressures and has had to adapt to evolving market challenges.

None more so than the Financial Conduct Authority’s in-depth review of the sector, from which they were left disappointed to find several firms were having insufficient discussions around alternative options, inadequately considering income and expenditure, and held a bias towards recommending lifetime mortgage products.

Under Consumer Duty, firms should have already taken action to drive improvement. But the FCA report provides a further steer over expectations to evolve the focus from treating customers fairly to delivering good customer outcomes.

At Air, our aim is to work closely with our partners and governing bodies to support advisers and firms with safer tracks through our cutting-edge technology, plethora of services and dedicated team to drive the market forward.

Renewed focus

Across the later life sector, prioritising affordability and providing a comprehensive consideration of product options is imperative. Assessing a customer's repayment capacity is crucial in determining eligibility for specific products and in managing borrowing costs. That’s why Air has a range of tools to help.

Air’s Later Life Lending Navigator tool

Through Air’s new Later Life Lending Navigator tool, which was designed for advisers alongside advisers and reviewed by stakeholders across the sector, you can assess your client’s affordability as well as narrow down, and document, the suitability of your client’s later life lending options.

This helps educate, challenge bias and determine not only what products your client may be eligible for, including RIO and standard residential mortgages, but also what advice route will help them achieve the best outcome.

Enhanced LIBF-accredited Air Academy modules

In Air Academy, we’re enhancing our LIBF-accredited training modules to equip advisers with the knowledge and skills needed to navigate the challenges of today's later life lending market.

Corporate Partner Endorsed WriteRoute

And we’ve also refreshed our in-depth fact find tool; WriteRoute. Our latest version is endorsed by our corporate partners and aligned to network and industry standards as well as best practice checklists. This Corporate Partner Endorsed version includes more mandatory affordability and customer vulnerability completions, bringing these crucial focal points to the forefront of the advice process.

Safer tracks supporting better outcomes

The FCA’s review shone a spotlight on equity release, highlighting areas where improvement was needed. And while it accepted that all firms included in the review had already made changes, the sector is still evolving.

Whether it be changes to firms’ advice philosophies; focusing more acutely on affordability and alternative options to ensure a customer receives the most suitable outcome. Or lenders bridging the gap between lifetime mortgages and traditional mortgages with new, innovative products to better engage older borrowers and provide them with a wider range of solutions.

Change is everywhere, and Air has been developing safer tracks to support networks, firms and lenders in addressing these areas more rapidly through the Later Life Lending Navigator tool, our Corporate Partner Endorsed WriteRoute and our enhanced LIBF-accredited Air Academy training modules.

We’re passionate about addressing these new challenges and regulatory expectations and confident that Air’s safter tracks will support with the transition. Speak to a member of our team for more information on how we could support you call 0800 294 5097 or email sourcingenquiries@airlaterlife.co.uk.

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