Clients still covering up health issues, advisers reveal

Carmen Reichman looks at the research...

More than one in four advisers (27%) said they have had clients who risk losing out on the best deals by covering up their health issues in meetings, according to research.

The study suggested widespread confusion about about the impact of health issues – which can often create better product terms for clients – with 45% of advisers saying clients fear being turned down if they tell the truth.

It also pointed to embarrassment being a factor for clients holding back information on their state of health from their adviser.

The study was carried out by equity release specialists more2life in November and focused on the views of 100 advisers of their equity release clients.

Almost a third of those questioned thought their clients feared they would have to pay more for their equity release contract if it transpired they had a health issue.

Advice is mandatory for those seeking equity release as the products are deemed complex.

However, some advisers were also found to be holding back asking the right questions, it found, with 22% admitting to not always asking health and lifestyle questions when they meet a client for the first time.

The issue was particularly pertinent during first meetings: about 14% of advisers said they did not ask as they did not want to make people feel uncomfortable.

However, a further 26% said they would ask once they get to know the client better.

more2life’s own analysis indicated as many as three out of four people aged 65-plus have conditions that could qualify them for an enhanced equity release plan, but only about one in six equity release products are sold on enhanced terms.

The analysis was based on data from Age UK, the Department of Health and ONS population data. Conditions considered spanned everything from being overweight and hypertension through to cancer and Parkinson’s disease.

more 2 life technical director Stuart Wilson said: “It’s all too common for a client to tell their adviser that they are fit and healthy, when in reality they are taking regular medication for a common condition, such as type 2 diabetes or angina.

“Or they may have had a serious medical episode in the past from which they have recovered and so they don’t appreciate its relevance to their lifetime mortgage application.

“However, we have found that the majority of those at retirement could qualify for enhanced LTVs if health issues are discussed. It’s important for advisers to dig a little deeper and tease out all of the relevant facts before they make their recommendation.”