Is technology key to bridging the equity release advice gap?

The research explored how retirees aged between 65 and 75 used digital channels to research equity release products and providers. Participants in the study were given the opportunity to test an AI-powered chatbot designed to offer personalised responses to questions around equity release.

Participants indicated that online platforms such as Money Saving Expert, as well as the websites of providers, were often their first port of call when researching equity release options. However, they are reluctant to share their contact details for fear of being called too early in their decision-making processes.

When researchers explained that conversational chatbots could offer participants personalised answers to questions, many agreed that they could represent a good starting point in their research. Participants felt they were in control of the discussion with chatbots, and suggested the anonymity offered by a chatbot was positive, allowing them to ask questions as many times as they liked without judgement. They also noted that chatbots were faster and less frustrating to use then ‘web chat’ platforms with human customer service teams, and were more likely to willingly provide their contact details to a chatbot once they felt well-informed enough to progress and speak with an adviser.

Jonathan Barrett, director of business development and partnerships at ABAKA, said: “The idea that ‘older people don’t use technology’ is a common misconception. Figures have suggested that around 85% of over 65s in the UK are internet users. Every person we interviewed was digitally proficient. We would even take it a step further to define the over 65s as an ‘Alexa generation’, with many participants in our research groups regular users of virtual assistants powered by AI.

“Financial planning and equity release can benefit from this trend. When researching the various avenues for funding retirement, customers might view equity release as a viable solution but can find these complex products difficult to understand, leading to a variety of questions.

“There are simply not enough advisers to answer these initial queries and help consumers assess whether equity release is the right option for their retirement plans. Technology can help bridge that advice gap. Having an informative website that is easy to navigate is a good place to start, but tools like conversational AI can take that experience a step further, assisting consumers on their fact-finding mission before they’re ready to seek regulated advice.”

Will Hale, CEO of Key, added: “While we believe firmly in the value of face to face advice and the support that this can provide customers as part of the process of taking out a later life lending product, we know that there is often considerable thought and planning undertaken before they even pick up the phone. Today’s research clearly highlights that we need to avoid assuming that over-65s are not tech savvy and step up our efforts to use online tools and services to support this demographic.
“Informed customers who feel comfortable that their initial questions have been answered are going to be more confident in progressing to the next step of engaging with an adviser who can take a more in-depth look at how later life lending can support their retirement ambitions.

“As an industry we must embrace the new technologies that are emerging to ensure that we can efficiently service a growing number of customers whilst still delivering consistently good outcomes through the advice that we provide.”