Key has urged firms that refer customers for later life lending advice to place greater focus on best practice standards to ensure good customer outcomes.

Key Partnerships, which is the referral and partnerships business of Key Group, has said that the continuing effects of Consumer Duty obligations and the FCA’s Later Life Mortgage Market Study have highlighted the need for mainstream mortgage brokers, IFAs and wealth managers to offer "holistic propositions".

This includes access to later life lending solutions through referral partnerships or by advising themselves.

However, Key has warned that too many firms do not understand what best practice standards to look for when selecting a referral partner, stressing that they should include prioritising customer outcomes as well as transparency and robust oversight.

It added that the crucial point for any referral relationship is "clear focus on customer understanding", while also ensuring that suitable advice is provided. This means that all relevant solutions are considered and discussed, including later life lending options such as lifetime mortgages.

Furthermore, Key stated that referral partners need to demonstrate comprehensive adviser training and ongoing competency standards, as well as quality assurance and robust oversight processes.

Advice should also begin with a "clear exploration of the customer’s needs and objectives", including an explanation of risks, benefits and long-term implications, and above all, this advice must be "demonstrably tailored", in line with Consumer Duty outcomes.

Director at Key Partnerships, Damon O’Connell, said that firms "need to be confident" when picking their specialist later life adviser partner.

He concluded: "Deep experience and expertise in the fast-growing market is essential. Later life lending can be complex and nuanced which means partners need to be able to provide genuinely independent, whole-of-market advice. With many new entrants emerging, working with an established referral partner with long-standing expertise in later life lending can help reduce risk and ensure consistent standards.

"The referral relationship must work for both the adviser firm and their client. Firms should be able to remain as involved as they wish, while maintaining and strengthening the client relationship.

"A referral relationship with a trusted partner such as Key Partnerships can support the development of new income streams and help deliver good customer outcomes aligned to Consumer Duty obligations."

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