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Key Partners unveils detailed look at equity release introducer sector

Equity release referral business Key Partnerships has released a new report – ‘Introducing the Introducers’ – to celebrate its brand refresh.

The research takes an in-depth look at the growing numbers of mortgage brokers, IFAs, wealth managers and estate agents who are setting up referral relationships to provide equity release to their customers.

It comes at a time when the firm has refreshed its online portal to provide additional functionality and a new marketing hub, which is designed to support introducers wishing to build their businesses.


Introducing the introducers

According to the report, which contains an analysis of over 5,000 firms and in-depth research on more than 200 individual introducers, the number of companies with referral agreements grew by 285% between financial year (FY) 2016 and 2018.

The most common types of introducers are mortgage brokers (42%), IFAs (40%), wealth managers (6%) and estate agents (3%).

It also suggests that introducers’ clients are wealthier than average – releasing £85,099 year-to-date (YTD) in 2019 versus £75,032 (Q1 2019).

In 2019, wealth managers’ clients (£139,966) released the most equity on average followed by IFAs (£89,677), mortgage brokers (£77.595) and estate agents (£76,102).

Impetus to engage

When asked why they prefer to refer than provide advice on equity release themselves, 45% of introducers said it was a specialist market with either head office (26%) or they themselves (21%) feeling more comfortable doing this.

Customer demand is also a strong driver, with 19% saying their interest was prompted by a client enquiry.

What’s more, 41% say they believe the main benefits are being able to help clients who they previously would have had to turn away, while 39% like that it allows them to provide a wider range of service to clients.

Confident about market growth

Given the current socio-economic factors, introducers told Key Partnerships that they are confident in the future growth of the sector.

In fact, 68% forecast growth of 10% or more over the next three to five years, while 18% bank on growth of over 30%. The average introducer expects 11% of their total income to come from equity release within three to five years.

The research also found that just one in three (32%) of introducers routinely mention equity release to clients and two out of five (42%) only start the discussion if they feel they have identified a client who might benefit.

With this, there stands to reason that introducers’ understanding may need to be enhanced to ensure they speak to all clients who might potentially benefit.

“With the later life lending market growing, organisations are increasingly looking to how they can support clients with these choices or – indeed – being asked by clients for support,” Jason Ruse, head of Key Partnerships, said.

He said that encouraging trusted advisers to speak to their clients about the potential uses of property wealth ‘helps people to think more holistically about their assets’, while helping specialists to support clients.

“Indeed, 41% of introducers felt that adding this service to their range helped them support clients they would otherwise not have been able to help,” he added.

“However, more still needs to be done to ensure that introducers are more comfortable mentioning housing wealth and equity release when they speak to their clients.”


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