Mortgage advisers failing over-50s on later life lending advice, Key warns

Mortgage advisers are failing over-50s on later life lending advice by not making them aware of all their options, Key Later Life Finance has warned.

The firm believes mortgage advisers are missing out on a “huge opportunity” to grow their businesses and deliver better customer outcomes under Consumer Duty rules.

Key cited Bank of England figures that showed that more than two out of five mortgages now run past retirement age, highlighting a need for a new approach from mortgage advisers. Key, however, warned that too many are ignoring options for customers in the later life lending market.

However, the equity release adviser warned that borrowers are often not helping themselves and that many worry they will not be accepted for new loans as they do not have sufficient incomes. This is then causing them to not engage with advice and instead sleepwalk” onto higher standard variable rates or to accept a product transfer from their existing lender which may not deliver the best outcome.

Key said the onus is on advisers to engage more proactively with their older customers and properly research the wider range of options in the later life lending market.

This is consistent with obligations under Consumer Duty and with wording in the recent Dear CEO letter written by the Financial Conduct Authority to mortgage intermediaries which stated that the regulator wants “to see firms do more to ensure customers have considered their options”.

Key CEO, Will Hale, said: “All advisers have an obligation to consider all later life lending options for over-50s customers under Consumer Duty, but too few are doing that and therefore failing their customers.

“Too many focus on their own area of expertise and do not think more widely.

“There is a huge opportunity for mortgage advisers to grow their businesses and improve their customers’ lives by focusing more on this sector and ensuring they stay abreast of all the product innovation taking place.”



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