Later life advisers need certainty more than ever before

This is a bumpy ride and advisers (and their clients) are the ones feeling the impact of the significant ups and downs that we are all witnessing right now.

Even before Kwasi Kwarteng’s ‘Mini Budget’ and the subsequent impact, we were in a rising rate environment, however those rises have clearly increased substantially over the past few days.

The markets are sending a message, and it is loud and clear – we’re not happy with the proposed tax cuts, the borrowing levels needed to fund them, and our confidence in the ability of the UK to pay back its debts is faltering.

Unfortunately, we appear to have a Government and Bank of England working to different agendas, and the outcome (at least for the moment) seems assured in terms of bigger hikes in rates over the short-term.

Our recent ‘Breakfast with Stuart’ meeting coincided with Kwarteng’s address to the Commons, and at the time much of the talk was around the cuts to stamp duty and what that might mean for the housing market.

That announcement has effectively been kicked into the long grass by “events dear boy, events”, as lenders seek to understand what their funding models will look like going forward, and how they might wish to re-engineer their products/rates in light of this.

As mentioned, it makes the job for later life lending advisers even more difficult. Rates were already changing with somewhat alarming regularity, and that looks likely to be upped considerably in the days and weeks ahead.

To that end, Air is supporting advisers with a specific page on our website designed to highlight all the rate changes, but even we are finding the sheer number of changes difficult to keep up with. However, we do hope it goes someway to providing these changes all in one place, so advisers do not have to go searching across multiple sources to find out what is happening.

What we also need to request from lenders/providers – and we appreciate this is a difficult ask given the nature of the market and the requirements for quick changes – is as much information and a ‘heads up’ as far in advance as possible.

We know this is tricky, but there’s little point in telling advisers rates have been changed/products pulled the day after they happen. This provides no opportunity to put in place any mitigation for this, and effectively leaves advisers with limited options.

Again, we’re all acutely aware that this is difficult in the current environment, but there should be some sort of commitment to providing detail on changes before they have happened, rather than the day after. I know that advisers have had this situation recently and to say it’s ultra-frustrating and makes a difficult job even more difficult, would be an understatement.

Advisers will be calm heads in this situation, but let’s try and give them the tools to do a proper job for their clients, and give them the time to get their quotes, KFIs and applications in asap, before those changes are made. If you’re telling them afterwards, what’s the point in telling them at all?

The big question of course, is just how long this level of uncertainty and changeability is going to last for. I am ever the optimist, but the outlook is not looking particularly good, at least not in the immediate short-term.

By the time you read this, there are likely to have been further sizeable, and perhaps seismic, changes, both politically and economically. Will Kwarteng’s Finance Bill even get through Parliament? Will Conservative Backbench MPs move again? When will the Bank of England intervene?

All questions that remain to be answered, and ones on which our sector, and many others, will be impacted deeply by when they are.