Blog: Covid-19, equity release and vulnerability


With vulnerability on the agenda more than ever – particularly in light of the impact of the pandemic on financial security – advisors across the UK are paying even greater attention to how they identify and manage customer vulnerability.

As part of our commitment to supporting the financial advice market, more2life launched its latest annual vulnerability survey of UK-based advisers operating in the area of ​​elderly lending at the end of last year.

As always, this provided valuable insights into the factors contributing to vulnerability and the steps the industry needs to take to ensure the best outcomes for all end-of-life borrowers.

Covid-19 accentuates old causes of vulnerability

While it is natural for advisors to view advanced age as the most common cause of client vulnerability, given that borrowers must be 55 and over to apply for a lifetime mortgage, there are various other sources of which they should be aware.

Indeed, half of respondents to our latest survey said that advanced age was the most common type of vulnerability they saw in customers over the past year, while an additional 38% and 35% reported having significant financial worries (mortgage) and life-changing events (such as bereavement) are the cause.

There is no doubt that Covid-19 and the resulting economic downturn has exacerbated some of these problems. Findings from the Financial Conduct Authority show that over-55s suffered the biggest cuts in income of any age group and were just as likely to have been made redundant since the start of the pandemic as older people from 20 to 39 years old. , a volatile stock market has squeezed pension funds, meaning this group must fund their final years with less retirement income than they might have expected before the pandemic.

For advisors in the seniors loan market, identifying and managing these vulnerable clients has also been impacted by the decline in face-to-face meetings. Every advisor interviewed in our research noted that restrictions on face-to-face contact with clients made it harder to spot signs of vulnerability. Almost a third (30%) agreed that the increased difficulty of involving family during this time had also made it more difficult.

Counselors adapt longstanding practices to overcome new stresses

However, despite these challenges, the consulting industry has risen to the challenge with vigor. Virtual meetings, document signing and identity checks are now standard practice at many consulting firms, while nearly two-thirds (63%) of consultants agreed that education and training on taking customer vulnerability had improved over the past year.

Lenders have also worked hard to equip advisors with the tools and knowledge to successfully identify vulnerability, and numerous training and resource centers have been launched to help advisors discuss loans remotely with confidence. Our Learning Lab is an example. We use it to deliver CII-accredited webinars, demos and videos to ensure our advisory partners have access to expert assistance when talking to clients.

Next steps for the sector

Our survey also showed that advisors are clear about what steps the industry needs to take to ensure it is providing appropriate levels of care. Three out of four advisors agreed that more family involvement would be beneficial in 2022, while the rest largely agreed the answer lay in product innovation or advisor education.

Lenders have a key role to play here too. We are strengthening our teams, our back-end processing systems and our educational resources as part of our ongoing commitment to supporting advisors and their clients. Although 2022 is set to be another tough year financially for many, clear progress has been made by the advisor industry to support those most likely to be affected.

We are confident that our next vulnerability investigation will reveal that the industry has built on these successes.

Stuart Wilson, Director of Corporate Marketing, more2life

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