The equity release referrals market has remained “robust” despite the impact of coronavirus, recording just a 1% year-on-year fall in the number of new introducers signing up each month, according to analysis by Key Group.

New data outlined in the second Introducing the Introducers report from Key Partnerships, the equity release referral service arm at Key, revealed that mortgage intermediaries now account for over half of the market (56%).

Between 2017/2018 and 2019/2020, there was a 47% increase in the number of introducers entering the market, according to the report, which revealed that this slowed as the impact of the pandemic hit. In 2020, Key saw 1% fewer introducers signing up on a monthly basis when compared to 2019.

With mortgage brokers the main driving force behind the introducer market, Key found that the number of new IFAs choosing to refer fell sharply from 25% in 2019 to 13% 2020, as they focused on their core businesses during the pandemic.

However, the proportion of wealth managers rose from 9% to 14% as they looked to offer clients additional borrowing options to mitigate issues such as inheritance tax (IHT).

Key Partnerships business development director, Jason Ruse, said: “While it is almost impossible to talk about the later life lending market in 2020 without referencing the pandemic, it is good to see that the referral market has been remarkably robust.

“We have only seen a 1% drop in the number of new introducers signing up on a monthly basis as they seek to provide safe access to this specialist market for interested customers.

“Mortgage brokers remain the most common referral partner as they look to add equity release to the range of later life lending options they can provide.  IFAs and wealth managers also commonly refer customers although we have seen a drop off in the number of new IFAs who are looking at this market as they focus on their core areas during this challenging time.”

The report, based on research among more than 500 introducers, also asked respondents why they had decided to refer equity release cases rather than transact the business themselves.

Twenty-six per cent of respondents, the same amount as in 2019, suggested their network or head office prefers them to refer to a specialist, while 24% indicated they saw this as a specialist area themselves so chose to refer – which had risen from 21% in 2019.

“It is interesting to note that half of introducers felt that they or the networks they work for viewed equity release as a specialist product, requiring specialist advice from a highly qualified expert,” Ruse added.

“Often driven by customer demand, they wanted to support their customers with their needs in such a way that they felt comfortable that they were receiving the support they needed. This bodes well for the industry as it continues to develop and we welcome more referral partners into the market.”

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