You wouldn’t expect the Financial Conduct Authority (FCA) to have a view on the equity release ‘brand’ or its central role in turning off potential customers, but that’s exactly what the regulator did talk about at its recent mortgage conference.
There have been some rumblings within the equity release sector in recent months about the negative perceptions of ‘equity release’ and it appears this has now become a concern of the regulator.
It’s obvious to see why there might be some deliberations around equity release because, let’s be honest, we need to get to a point quickly where those who are ‘cash poor/asset rich‘ are able to take advantage of their properties and use them to fund their retirement living.
At present, at least according to Christopher Woolard, director of strategy and competition at the FCA, part of what might be holding individuals back from accessing this equity is the negative associations they have with equity release.
Indeed, Woolard went so far as to say that ‘equity release’ became a dirty word some time ago and however hard we as an industry might clean, that dirt won’t come off.
Woolard suggested this general ‘dirtiness’ may not only have put potential customers off but also (rather importantly) providers and, if the industry is going to come up with a satisfactory solution to funding our ageing population, then a rebrand might well be required.
Which all sounds well and good but will it really make a jot of difference?
Firstly, he may certainly have a point around the tarnished reputation and the industry’s ability to keep it clean.
I’m sure that if you surveyed a group of pensioners, a number would say they knew what equity release is. However, dig that little bit deeper and I’d also suggest that a more negative view would be revealed, probably because of various headlines but also perhaps a case of ‘Chinese whispers’ among their peer group.
However, would a rebrand actually hit the mark?
I have visions of pint-sized pop star Prince changing his name to that squiggle only to then be known as ‘TAFKAP’ – the artist formerly known as Prince. With a rebranded equity release product, we’d probably have to call it, ‘the product formerly known as equity release’.
Whatever it was named, there would need to be a re-evaluation of the product and what we were actually offering.
This would mean going back to stage one when it comes to marketing and ‘selling’ the product in a positive light.
Firstly, this falls upon advisers – given that we now sell the majority of cases – which would mean we need to look very closely at our own marketing skills. How could these be tested?
Well, perhaps we could look at our own doorstep – is the adviser known in their area as the go-to expert on raising money in retirement? This would give you some idea about the quality of your marketing performance.
Secondly, there are extremely pertinent reasons why equity release might have a bad reputation and that’s because in the past there has been bad practice, there has been a lack of training, there has been poor quality advice and market/sector knowledge.
A poor reputation does not simply appear out of thin air – SHIP, in particular, did a sterling job in the early years, however, in more recent times, there have been a large number of issues raised by the press, consumerist lobby, etc and we have to admit that not all of them were unfounded.
So, yes, a rebrand, a new name, a new focus may give the industry a chance to wipe some of the slate clean, however, the markings from recent history will still be there.
And therefore a new brand may be what is required but it also has to be coupled with much more – that means rising standards, excellence across the board, and the motivation and ability to build equity release into a much more mainstream offering.
One that is part of the holistic advice process for everyone who is either in or reaching retirement and who wants to know what their available options are and how they might be able to access them.
Get on board
Interestingly, this requires a considerable buy-in from advisers and may well require a sizeable attitude and behaviour shift as well.
For instance, we are running four development events this autumn; out of 4,000 members, 90% have not booked to attend. Can we assume they are at the top of their game, with fully booked-up diaries, unable to spare the time to share and develop their professional understanding and sales skills?
Do they simply have no time to write any more equity release business and, therefore, don’t require such events?
Perhaps not, and you would, therefore, question whether a rebrand would help these advisers at all -in the end change has to come from all parties. If nothing else were to change, a rebrand of name alone would provide a short-term superficial benefit at most.
Stuart Wilson is managing partner at Later Life Academy
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Further reading: Can equity release help solve the long-term care funding crisis?