Customers release 50% more equity through referrals

Customers introduced by intermediary referral partners released an average of £70,019 in comparison with the average of £46,919 for the rest of the market. Referral customers also had a significantly higher average property value of £325,433 compared with £259,882 for the market.

Key believes that the higher average loan values from intermediary referrals are down to the wealthier client bases of advisers – both financial planners and those concentrating on the mortgage market.

In London the average house price of referral cases is around £678,000 compared with £522,000 across the market as a whole and average values released are £153,000 compared with £127,000 highlighting the higher net worth in the capital.

Will Hale, director at Key Partnerships, said:

“In many cases advisers have long standing relationships with clients who they have traditionally supported on investments and other services.

“However as their client base grows older, their advice needs change and advisers who have no experience or expertise in equity release can be at a disadvantage. The equity release market is changing rapidly with new solutions and rates that are only available through specialist firms.

“The Financial Conduct Authority has cautioned advisers from ‘dabbling’ in this market recognising the need for specialism.

“There is excellent support available from lenders and the Equity Release Council in terms of helping advisers achieve the necessary qualifications and to maintain competency. However, many intermediaries are deciding that referring to a trusted specialist partner is a more commercially viable way of participating in the equity release market and ensuring their customers receive the best outcomes.”