Majority of equity release customers conduct research before turning to advice

An estimated seven in 10 (70%) equity release customers do their own research before speaking to an adviser about their later life lending options, new research by Standard life Home Finance has found.

Around a third (34%) of customers revealed they had relied on information from families and friends, while a similar figure (35%) had requested guides from various companies. Just one in seven (14%) went to see a financial adviser without gathering any information ahead of time.

Standard Life said that its research, based on a survey that collated the views of more than 500 over-55 homeowners who had considered equity release, highlights the decision making process as well as the misconceptions that advisers need to address as part of the advice process.

Asked about their views ahead of speaking to an adviser, almost half of clients (40%) stated that while equity release isn’t right for everyone, it can help some people. A further 30% felt it was a good way of accessing some of the equity tied up in your home.

However, 22% indicated they were worried it could impact or stop them leaving an inheritance, while 15% were concerned they could owe more than the value of their home. Almost one in ten (8%) worried they could pass the debt on to their families.

After speaking with a financial adviser, the vast majority of respondents (97%) said they felt they understood equity release. Six in ten (61%) people felt relieved after their consultation as it gave them a clearer idea of what their options were, while 58% stated they felt optimistic for the same reason.

Head of sales at Standard Life Home Finance, Kay Westgarth, said that specialist advice is “vital” to help people to make the right choices for their individual circumstances, but also stated that an “informed customer is an engaged customer” who has started to think carefully about their options.

“That said, certain misconceptions and concerns can arise when information-gathering or conducting independent research, which may need the support of a specialist to unpick,” Westgarth commented.

“For example, equity release products have evolved and developed significantly over the last five years and many people may not realise that those who take out a product with Standard Life Home Finance receive downsizing protection as standard.

“Simply highlighting product features – such as the no negative equity guarantee, the ability to make interest payments and the availability of inheritance protection – can set many customers’ minds at rest. The difference in customer attitudes before and after having a consultation with a financial adviser clearly shows the true value of advice.”

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