July 2019: “Introducing the Introducers” – a new report from Key Partnerships (one of the UK’s largest equity release referral businesses) – 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 was commissioned to celebrate the brand refresh that Key Partnerships has unveiled today (www.keypartnerships.co.uk/) which sees the firm completely overhaul its online portal to not only provide additional functionally but a new marketing hub designed to support introducers wishing to build their businesses.
Containing analysis of over 5,000 firms and in-depth research on more than 200 individual introducers, the report paints a picture of a sector which as seen the number of companies with referral agreements grow by 285% between FY 2016 and FY 2018. The most common types of introducers are mortgage brokers (42%), IFAs (40%), wealth managers (6%) and estate agents (3%).
It also highlights that introducers clients are wealthier than average – releasing £85,099 (YTD 2019) vs. £75,032 (Q1 2019). In 2019, Wealth managers’ clients (£139,966) released the most followed by IFAs (£89,677), mortgage brokers (£77,585) and estate agents (£76,102) – [see table below for further details].
When asked why they prefer to refer rather 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 interested was prompted by a client enquiry.
Now that they are involved in the market and have a referral relationship in place, 41% say they believe the main benefits are being able to help clients who they previously would have had to turn away and 39% like that it allows them to provide a wider range of services to clients.
Given the current socio-economic factors, introducers are confident in the future growth of the sector with 68% forecasting growth of 10% or more over the next three to five years and 18% banking on growth of over 30%. The average introducer expects 11% of their total income to come from equity release within three to five years.
But the research found 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. While introducers naturally understand their clients and their needs, there is some concern that their understanding of equity release and its uses may need to be enhance to ensure they speak to all clients who might potentially benefit.
Jason Ruse, Head of Key Partnerships, said: “With the later life lending market growing, organisations are increasingly looking as to how they can support clients with these choices or – indeed – being asked by clients for support. Over the last two years, we have seen a 285% increase in the number of introducers as mortgage brokers, IFAs and wealth managers look to meet this need.
“To better serve this market, Key Partnerships has undertaken a brand refresh and completely overhaul its online portal to not only provide additional functionally but a new marketing hub designed to support introducers wishing to build their businesses. The confidence of introducers in the future of the equity release market is evident which is good news for clients as well as introducer businesses so we wanted to position ourselves to support them.
“Encouraging trusted advisers to speak to their clients about the potential uses of property wealth helps people to think more holistically about their assets and helps 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.
”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. We hope that the new enhanced support provided by Key Partnerships will help to make this easier for introducers.”
The table below shows how the value of property wealth released varies between the equity release market as a whole and the introducer market.
|AVERAGE AMOUNT RELEASES||2018||2019 (YTD)||CHANGE|