Master Later Life Lending - By Air

Enhancing Financial Advisory Skills for Later Life Lending

• Paul Glynn • Season 2 • Episode 4

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Unlock the secrets of the later life lending market as we bring you insights from industry leaders Will Hale of Key Group and Martin Reynolds of Simply Biz Mortgages. This episode promises to equip you with the knowledge to navigate the crucial decision of advising clients directly or referring them. Explore the commercial dynamics of direct authorization versus joining a network, and understand how factors like client volume, confidence, and time constraints shape an advisor's journey. With the growing trend of borrowing beyond retirement age, it's essential to adapt your business model to meet the evolving demographics of the over-50s population.

The landscape of financial advice isn't divided by silos anymore, and this episode highlights the importance of breaking barriers between equity release and mainstream advisors. Establishing effective referral relationships is key—location, specialism, and alignment with ethical standards are just a few factors critical to choosing the right partner. We stress the importance of ongoing due diligence and nurturing personal relationships to maintain a strong referral network. By broadening their horizons and considering all later life lending options, advisors can ensure the best outcomes for their clients.

Looking to enhance your competencies? We discuss a wealth of resources, from data mining your client banks to leveraging support from AIR Academy, Key Group, and Knowledge Bank. Embrace technology to balance advice and transparency, and address remuneration bias with the clarity it demands. With these insights, advisors can confidently expand their services, engage with clients more effectively, and provide holistic advice that includes estate planning and long-term care. Join us for a comprehensive exploration of this evolving market and arm yourself with the tools needed to succeed.

The Master Later Life Lending Podcast is aimed at qualified advisers in the mortgage or financial services industry. 

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Paul Glynn:

Welcome to Master Later Life Lending, the podcast designed to help advisors stay ahead in the evolving later life lending market. I'm your host, paul Glynn, and today we're tackling a critical decision that every advisor must face how to decide between advising or referring in the later life lending market. In this episode, we'll explore the commercial considerations of participating in the market, how to decide whether you should advise clients directly or refer them, and the implications of choosing between direct authorization or joining a network. We'll also dive into business model options, including whether to be whole of market, operate on a panel or tied, and discuss how to set fees and choose the right technology for your business.

Paul Glynn:

Joining us today is Will Hale, key Group Director, and Martin Reynolds, who is CEO at Simply Biz Mortgages. Both will help break down the different paths available and offer valuable insights for advisors that are looking to navigate these important choices. Whether you're already established in the later life learning market or you're just beginning to explore your options, this episode will provide you with the clarity and the practical tips you need to make informed decisions. Martin Will welcome If we could start just by coming to both of you in turn, just to talk a little bit more, to introduce yourselves around your roles in your day-to-day responsibilities at the organisations you work for. So, martin, could I come to you first?

Martin Reynolds:

Yeah, thank you for the invite and it's great to be here. So yeah, martin Reynolds, ceo of SimpliViz Mortgages, so does what it says on the tin in the title. Look after our mortgage club, our whole proposition around mortgages, general insurance. Also chairman of FIBA, which is a commercial trade body, and I look after our valuation business gateway and the consumer credit centre within the Fintel Group.

Paul Glynn:

Thanks, Martin Will.

Will Hale:

Thanks, paul. Yes, will Hale, and I'm Group Director responsible for all of our distribution businesses within Key. So that incorporates both our internal advice business, which is a specialist later life lending advice operation, and also AIR. So, yeah, responsible for for all of air's activities, across the sourcing platform, across the club and obviously across the academy as well thanks will.

Paul Glynn:

So I'm really looking forward to the conversation with you both today and see what direction it takes us. So air has been working with a number of advisors or firms, um, that are grappling with whether or not to enter the later life lending market, either because they're thinking about it as an opportunity or their businesses are just naturally evolving as they've built them over time. For firms that are deciding whether or not they want to enter the market, whether to advise or refer, what factors come into play when making that kind of decision? So, martin, can I come to you for your thoughts? Thoughts first, please sure.

Martin Reynolds:

I think some of it is down to confidence. Um, do you feel that you understand the market, you're confident to actually advise on it? That then will you have enough clients to be doing it on a regular enough basis to continue that that confidence? So, and then, just how busy are you generally? Because I think the mortgage market has got so much more complicated over the last sort of 10 years. That sort of 10, 15 years ago you probably could feel that you could do everything. You know advise on mortgages, all flavours, do general insurance, do protection, do a bit of everything else, whereas now I think that a vanilla mortgage is still very complex, everything that's happening as well, with product transfers, rewrites, etc. I think advisors are becoming time poor. So I think that is a key bit as a moment is at the moment. Do you want to add something else to it or do you just want help in identifying those type of clients within your client bank that you can then refer on to a third party?

Paul Glynn:

Yeah, we pick that up in. Our advisors are doing a brilliant job, but they are massively, massively stretched in the market sometimes that they're operating in. Will just developing that theme a bit further on what Martin was touching on in terms of changing customer need and demographics, what's your take on what impact that's having at the moment?

Will Hale:

Yeah, certainly. First of all, I completely agree with Martin's comments, but I think for me it probably starts with trying to define more precisely what we mean by later life lending. And in its broadest possible terms, later life lending for me means lending to anyone over the age of 50. So, just in terms of context, just to give you a few stats, if we talk about the over 50s population in the UK, it's 21 million people, so that's about 38% of the total population of the country. And if we look at a slightly older demographic so the over 65s there's 11 million in that cohort, so 19% of the total population of the country. So we're not talking about a small group of people here. This is a significant potential customer base for mortgage advisors customer base for mortgage advisors. And then, if we look at how lending trends have changed for that particular cohort of the population, just as a couple of examples, the Bank of England in Q4 2023, said that 42% of all new mortgages had terms that were extending beyond state pension age. And the FCA themselves have said that by 2050, they expect 10% of all existing mortgages to be held by those over the age of 67. So the borrowing themes that exist with this older customer cohort have changed materially over the last decade or 20 odd years and they're going to continue to change going forward.

Will Hale:

And I think what is really important is that the mortgage industry and mortgage intermediaries in particularly, sort of tune into that opportunity and start to evolve their business models and advice processes and philosophies to really accommodate the changing needs of their customer base.

Will Hale:

So customers, you know, traditionally took out a mortgage in their 20s and had repaid it in their 50s.

Will Hale:

That's just not what happens these days.

Will Hale:

Customers are taking out mortgages later and their borrowing needs extend well into retirement and sometimes throughout their entire lifetime and mortgage advice processes need to take that into account.

Will Hale:

So it's probably challenging mortgage advisors to think beyond probably the traditional two-year, five-year fixed sort of remortgage process and think about how they can sort of use the products that are out there to give customers more flexibility and to align how they manage their borrowing with their sort of changing needs over their lifetime, so changing how much they repay, for example, according to whether they're still working, whether they're in sort of part retirement or whether they've retired completely and actually want to use their resources to fund other activities from a lifestyle perspective. So for me, you know there are challenges in for mortgage advisors understanding some of the specialist products out there and an industry we do need to help sort of fill some of those, um, sort of understanding gaps. But the starting place for me is just for advisors to recognize that customer needs are changing and therefore there's a great opportunity if they can adapt their businesses to align to that I think for me.

Martin Reynolds:

Well, I think you hit some couple of points there that I'd pick up on is you're right about the age. So 20 years ago, first time buyer, average age 25, taking a 25 year term, they'd be 50. So 15 years of freedom before retirement, so to speak, whereas now average age is 32, 33, and a lot are now taking a 30-year term. So actually their first mortgage is taking them to the precipice of retirement, if that's still the retirement age when we get, when we get there, that sort of thing. But so actually it's probably only their next move. If they move house, they're straight into a mortgage that takes them past retirement.

Martin Reynolds:

I think you're right, as advisors we need to be looking at, but I think there's also lenders need to be looking at their processes, their criterias as well. And you know if you are going in, how are you working affordability out? So are you working it out on now for 35 years, on what they're earning now, or are you taking into account that after 20 years, 25, they'll be retired? So shouldn't there be an affordability that looks at that last 15 years? Maybe that says well, actually you you're on in capital and interest. You've only got x outstanding. Your outgoings are going to be less anywhere because you're retired. So actually it's a different affordability model and I think that is is stopping some of those deals going through, because it's a very much a one-size-fits-all.

Paul Glynn:

Yeah, listening to what you both said there, it definitely sounds like the probability of an advisor coming across that type of conversation is increasing and is only off what you both said going to increase further. So if those conversations are also off you both said going to get more complex how important is it for advisors and firms to track and to evidence the conversations that they're having with customers about, you know, in that complex environment, the wider options that are open to them, potentially beyond what might be the scope of that firm or that advisor's own advice proposition? Martin, can I come to you first?

Martin Reynolds:

Yeah, sure, I think there's one thing Within our company we say if it's not written down, it didn't happen. So that for me, is always a key bit from a compliance point of view and keeping you safe and making sure you've got the correct records of conversations with your clients, because how can you remember what was said 12 months, 2 years, 3, five years ago when you've got those number of clients? So I think having that clearly documented in every type of meeting that you have with a client is key. It's key because, one, as I say it, protects you, but two, it's giving you a referral point back when you next talk to the client, saying if you remember, at the last meeting you were talking about this, your ideas were to go here and your retirement plans were in this space. Is that still what you're looking to do? So it's a sense check, if nothing else, to start with.

Martin Reynolds:

But I think for me it's also a way of the tracking bit. That's what a good CRM will allow you to do is to understand and track that client's journey, their decisions. But the wider bit as well is it's not just their mortgages I'm sure we'll come on to later at some point, it's when they get to a certain age. They've then got children as well, and we know the age of first-time buyers is moving with. You know the bank of well, it's a bank of family now, isn't it, rather than bank of mom and dad, it's those sort of things. As an advisor is, where's it going to, and are you then starting to try and look after the whole family, rather than the initial client that you took on as a first-time buyer?

Paul Glynn:

when they were 32. Well, let's let's make sure we touch on some of those wider, broader business and commercial considerations as we go through this session later, I think and that the point you've noted there on you know, if it's not written down, it didn't happen. And the importance of a CRM is definitely topical and we've touched on that in other podcast episodes because it's absolutely relevant that the firms build the processes and capabilities that support all those types of conversations. Firms are going to engage with these customers and potentially want to refer rather than to advise themselves, then how can or even create a flow of customers through B2B relationships? Then, how do firms build long-term, high-value B2B relationships with wider intermediary partners? And how should you decide who to refer to and whether your chosen route is to write or refer? I know there's a lot to kind of work through in that question, but, will, can I come to you first?

Will Hale:

Yeah, there is a lot there, paul, but, will, can I come to you first? Yeah, there is a lot there, paul, but before I sort of answer that question of advise or refer directly, I think I'd sort of come back to maybe a previous question around scope of advice, because I think this is really sort of at the heart of some of the challenges we face in terms of evolving the later life lending market. I think traditionally the market has been quite siloed. You've had sort of equity release, specialist advisors such as Key on one side of the fence and mainstream advisors sort of sitting on the other side of the fence and in some ways, never shall the two meet. I think you know, as we've talked about, with changing customer needs and an evolving product landscape, you know, breaking down those silos is is really crucial and I think that poses some really interesting questions, particularly in light of consumer duty as well for advisor firms and individuals. Consider scope of advice, because I think what we've talked around in later life lending, both from a commercial perspective but also from a customer outcome perspective, you can't afford to ignore all of the different options that are now available in the market and how to deliver the right outcome, therefore, for older customers. So I think it's critical that advisors don't bury their heads in the sand, and that's on both parts, both equity release advisors and mainstream advisors. So, irrespective, if you decide to maintain a very tight scope of advice, you still need to have those broader horizons and, where options may be more suitable for customers than those within your scope of advice, you need to be able to refer.

Will Hale:

So that sort of loops back to your question around how do you choose a good referral partner? And I think that comes down a lot to personal choice. I think it's about having clarity around what you're looking for for a referral partner. So it might be location. It might be that you want to develop a relationship with a local advisor who has a specialism in an area that you don't work with. It might be that you want to develop a relationship with a local advisor who has a specialism in an area that you don't work with. It might be that you want to develop a relationship with someone who can offer referrals back in the other direction.

Will Hale:

So where are businesses dovetailing in terms of the propositions that they offer and how can they work collaboratively in that sense, the propositions that they offer and how can they work sort of collaboratively in that sense? Clearly, commercials are probably going to be a factor as well. So what terms can you agree with that partner that make it work for you? But I think most importantly for me when you talk about referral relationships, it's having the confidence that the firm or the individual that you're passing a customer across to is going to align to your own sort of customer service and sort of ethical standpoints.

Will Hale:

If you're handing over a customer, you want to be sure that they're going to receive the quality of service that you yourself would deliver and expect. And some of that then comes down to communication to make sure that you're kept informed in terms of how that relationship is evolving, how a transaction is evolving, so that you don't lose control of that customer relationship and all the future opportunities that that may bring. So it's quite a lot to think about actually when thinking about a referral relationship. But you know, we've seen in our business that they can work really effectively if the right partner's chosen and if those relationships are managed properly and for me on that it's.

Martin Reynolds:

It comes to a couple of things as well due diligence so that's part of you do due diligence is checking, as you say, the ethos, the alignment. How do you do that so you know it is looking at their website. Is it talking in in the same sort of terms that you will turn? It's maybe even looking on linkedin at some of the senior people within those businesses. What type of posts are they putting out? Again, does that align to or are they going against what's on the website? That sort of thing. And maybe meeting some of the team that you're going to do that referral with. We can do that virtually now, as we are.

Martin Reynolds:

But I think the due diligence for me shouldn't be a one-off.

Martin Reynolds:

It should be something that's that's carried out every sort of, say, 12 months, because a business might change in that period and they might have new people in a new management team. So do you realize that that has changed and do they still carry that on? Because we have seen that before when, when people have changed and then there is people then trying to cross, sell up, sell everything that. And it is that alignment of getting the contract right, getting that clear so that you know what it is that you want to do and also if you think that you might want to go into writing that type of business yourself at a later date. You actually may be partnering with a firm that will let you sit in on those meetings, or some of them, so that you gain the understanding and the skill set of of how you talk about those products, if you don't currently advise on them yourself, which then gives you the knowledge and the confidence to then take it on yourself, maybe in 12 months, two years time.

Will Hale:

And at that due diligence point, Martin, it's really important that there's so many resources available now to do that due diligence in the same way as customers shop around and they look for feedback. Great resource for customers and advisors when thinking about referral relationships to see the sort of feedback that that advisors are getting from customers and give themselves confidence again that the right level of service is being provided yeah, that's.

Martin Reynolds:

That's unfettered advice, ultimately, and and feedback from from customers who've been through that experience. But also, you know, if you're in, if you're a part of a network, I'm sure the network will have have some of those referral partners there that they've done thorough due diligence on Most third-party compliance providers or mortgage clubs. Like ourselves, we will have referral partners that we vetted and put forward to our members that you can use these. We've done a lot of work with them, so there's people that can help you do the due diligence. But I'd still also do your own, because even though somebody's done it on your behalf, on the wider bit there's still that personable relationship that it's down to do you get on with the people that you want to refer to.

Paul Glynn:

Thanks both. I mean there's a couple of things in there I want to explore a bit further. So, martin, you talk there about you know there's the support there for in the network context or firms could choose to be directly authorized, so we'll go back to that in a second. I think just generally what support exists for firms who do want to improve their core competencies in this space. And we do quite often see people discover a vein of customers or an aging client bank and they start to refer and, as you just said, then they start to want to think about is that engagement in expanding their advice services right for them as a business? What support is is there out there in the market for firms who are going through that transition or want to start it?

Martin Reynolds:

there's quite a lot, and I'm sure we'll talk about air academy, um. So I'm glad you asked me first, um, but yeah, I, I think for me again, most distributors will have lots of collateral on their website. We ourselves do later life events, we do equity release only events. We do lots of events about understanding your client bank, and it's not all about how do I go out and source new clients. A lot of time it's how do I utilise my existing client bank to understand what opportunities there and that could be.

Martin Reynolds:

If we're talking about later life, it's the age demographic. If we're talking about commercial insurances and commercial lending, it's looking at how many of your client bank are self-employed. So if they're self-employed, do they own their own premises? So to me, it's about data mining your own client bank, and that's back to a CRM system. Those sort of things will help do that. So it's understanding that and then working with partners who can help you do that. So lots of us will help with the technical and the sales aspect of it. It's also finding a partner that helps and can look with you and work with you about data mining your client bank.

Will Hale:

Yeah, and from my perspective, Paul, I certainly don't think advisors can sort of criticise the amount of support and resources that are available.

Will Hale:

It's all there if you want to look for it, and obviously Key Group are passionate about trying to help advisors sort of enter this market in whichever way they choose, whether that's advising themselves or referring so whether it's through sort of the air and the resources that Martin referenced through the academy that can help advisors go on the journey to get qualified and then to remain sort of competent to advise in this space and to learn about all of the different sort of products that are available in the market and how to engage customers properly.

Will Hale:

All those resources are available through AIR, but also more widely through the lender universe as well. I think you know, through the AIR lender ambassadors there's a huge amount of sort of marketing collateral. There's a huge amount of technical help and content available for advisors who either are looking to engage in the market or are already in the market, and similarly again, across our other partners, whether it's solicitor firms such as Equilor, who specialize in this space, or technology providers such as Knowledge Bank, who are experts around criteria in the in the sort of later life lending market. All of those firms offer fantastic sort of resources for advisors. So again, my message to for advisors would be you know it's all out there, just engage with it. You know, take the decision, as I say, to take the later life lending market seriously, and then all the resources are there to help you really make a success of it.

Paul Glynn:

Yeah, I agree with that, and a number of those partners have definitely come forward in different elements of the podcast episodes to try and showcase some of that insight and expertise. Martin, I just want to go back to the other part of the answer you gave earlier in terms of, you know, firms may want to come into this space, but whether they write or refer is one decision, and then what environment from a regulatory perspective and a wider perspective is another decision. Quite often we engage with firms who want to learn more, want to engage more with the market, but they have still got an open question to solve, as is it right for them to do that under a network environment or to be directly regulated. So what are the benefits or challenges of being directly authorized or not, particularly in the equity release market?

Martin Reynolds:

Yeah, I think it would depend on your model. I think it would depend on if you're an appointed rep. It would depend on your network, because I believe not all of them will allow all their advisors to advise on it. So I think it's that talk to your network, talk to them and go. This is what I'm looking to do.

Martin Reynolds:

What do I need to do for you to be happy to authorize me to advise on it within the network and work towards those standards? Because they're there for a reason and they're there for the network. I think if you're you're you're directly authorized. It is understanding what support you've got. Have you got the right compliance framework to move into this space? Because it's. It's a different journey to a, to a first time buyer. It is definitely a different journey.

Martin Reynolds:

So, making sure that you've got the right compliance journey, you've had that reviewed and signed off by by your third party provider, because that will give you the confidence that you're on the right rails to start with, rather than trying to backfill at a later date and it is then just looking at the other areas. Will you know, will it? What routes do you then submit through? Where do you get the training from? Is there anything on the pi that you need to advise your pi insurer that you're now moving into that space from the last time, because they do ask now every year what markets are you in and you know. That's just so that they can understand the risk doesn't mean to see say the premium will go up, but just make sure that you're open with your pi insurers to which markets you are in and or consider moving in, and they'll give you the feedback of what that will do and that can help you make decisions as well, yeah, pi can comes up a lot in conversation.

Paul Glynn:

So your your advice is be as open as you can be with your network and pi partner I think with pi, it's always be open.

Martin Reynolds:

It's any type of insurance, isn't it? Always be open with your insurer, because what you don't want is to to want to make a claim and they'll go. Well, that was non-disclosed. We're not covering it. Whether that's in just your work life or even in your private life, your insurance it's be open and be honest with what you have.

Paul Glynn:

Thanks, martin, I think well, I just want to build on that further. So we've gone through that journey of write or refer what kind of model suits you in terms of your business model and needs. I think if we expand that a bit further to talk about what firms may want that proposition itself to look like, then the next kind of layer of decision-making for firms are do they consider a whole of market proposition, a panel proposition and things like where to set fees, what the customer proposition should look like in terms of technology? So Will? What are your thoughts and guidance for firms there where they're going through that decision-making process now?

Will Hale:

Well, I think it's very much like Martin said in terms of that consideration, whether to be directly authorized or an appointed representative of the network. There's not a sort of right answer for everyone. It depends very much on your own sort of business model, your own sort of existing resources and expertise and what's right for one firm or one advisor won't be right for another. But I think when it comes to thinking about the sort of scope of your proposition in terms of whether you want to be whole of market, panel or even tied, I think again there's a number of things to think about there. So commercials so you know, clearly through a tied or panel model there might be the opportunity to secure some enhanced commercials. But that needs to be sort of considered against a more restricted proposition and does that sort of put any barriers to customer acquisition or conversion with that limited proposition.

Will Hale:

So choosing the right tide or panel partners is really important. To make sure that that's achieved is really important to make sure that that's achieved and it might sort of be considered alongside what you offer in other parts of your business as well. So you know if you as a sort of proposition, as a firm, if whole of market is critical to what you're trying to put out there as your customer proposition, then maintaining that through all of the different services you offer could be important. But I think in the later life space particularly I mean my personal view is that looking at more sort of tied or restricted panel models is probably makes sense for a new firm coming into the market. There's quite a lot of sort of nuances to consider in terms of products and lenders and criteria, and if you can simplify that for yourself by restricting the scope of the products you offer, I think you can still cover the vast majority of customer needs and find a suitable product for the vast majority of customers with actually quite a tight panel in this space.

Martin Reynolds:

So I think that's definitely an important consideration for firms coming into the market I think that's a key point is understanding what your client bank is and therefore, if you do want a shorter panel, that panel covers it, yeah, and you're not trying to shoehorn people into a product set because you've got that short panel. It's and reviewing it on a very regular basis and you'd be expected to, under consumer duty, have that review. But that other part is, if you're a holistic advisor, is you know, having that smooth transition of products, of being available to to the customer that doesn't look like you've just hit the door and have to open it to go through it? How does that do so? For me, that's key.

Martin Reynolds:

I would also say, when you're looking at that is he's actually working with the lenders that are going to help you in that support as well. So you mentioned commercials. You know good point, it's important but you also need to be have a relationship with those lenders. That you've got the support from bdms. You've got people who'll train. You got people you can talk to and discuss those things, especially if you're new to that market, as you get that guidance and that help.

Will Hale:

Yeah, and just to come back on that point around sort of consumer duty and fair value, I think it's really important that price isn't the only consideration.

Will Hale:

Like you say, it's important that you review a panel of providers that you work with and that you're confident that that fits the target market that you're looking to address.

Will Hale:

And, paul, one part of your question I didn't address in my first response was fees. So again, I think you can't sort of separate the question around where you set fees from the rest of your proposition and, in terms of that fair value consideration, it's really making sure that your fees reflect the, the service and the scope of proposition that you offer. So the whole thing can be looked at and you can be confident that you're delivering the right outcome for customers and offering fair value. And and as you rightly say, martin, that's not a once in time, uh consideration that needs to be under sort of regular review at different intervals to make sure that you're you're sort of um keeping pace with market developments, with changing customer needs, and you're always questioning yourself as to to whether you're doing the right thing in that space so how does that just to develop that conversation a bit further than how does that panel versus whole of market conversation fit within a wider over 50s market where you've got broader product types as well?

Paul Glynn:

so you know we have said it's one market with um a full spectrum of products from residential mortgages that are targeted at older borrowers now, as you opened with martin earlier, through to to rio and and equity release. So how does that decision making on a panel fit with a broad spectrum of products?

Will Hale:

Well, firstly, let's be really clear that when we talk about later life lending, that is not synonymous with equity release. So, as you rightly point out, paul, the later life lending market is a very diverse market of product options. So that includes mainstream residential mortgages that are available for older customers, it includes RIOs, it includes TOs, it includes the full spectrum of lifetime mortgages and let's remember that lifetime mortgages aren't all born equal these days. So you've got what I describe as sort of full fat roll up lifetime mortgages. You've got lifetime mortgages that allow optional repayments and you've got lifetime mortgages that allow optional repayments and you've got lifetime mortgages that have mandatory repayments. So it's a really broad spectrum of products when you sort of look at the options available.

Will Hale:

But I come back to, I think, a sort of common theme that we've been talking about through this podcast is that when you think about the makeup of your panel and the scope of advice proposition and what products it includes, there's not a one-size-fits-all.

Will Hale:

It's for every advisor and every firm to decide where they're going to draw that line. But ultimately, in order to get the right outcome for the customer, all of those products have to be considered, whether you advise on them yourselves or not. So if you don't advise on them, like we come back to, you need to have an appropriate referral relationship in place. So if the scope of advice that you offer isn't going to deliver the right outcome for the customer, you do have a route to hand off that customer to someone who can help them achieve the right outcome. So, as I say, I don't think it's about forcing people to look across all of those product options, because it can be quite a confusing and complex space. But advisors do have to have that recognition that all of those product options exist and for different profiles of customer, different profiles of product are going to be suitable.

Paul Glynn:

Thanks Will.

Martin Reynolds:

I think again, if you then take that to the nth degree as well and we mentioned it before about having the referral partners it's not just the mortgage journey, it's the whole customer journey. So should an IFA be utilised as well, and should an IFA utilise a mortgage broker to look at things, especially if we are in the sort of tail end of that product set and looking at equity releases, should we be saying actually is it better to take an equity release product now or is it better to do a pension drawdown or vice versa? So it depends what questions being asked by the customer to the advisor, but should those be taken into account? So actually having the referral partner that goes along the chain of people's sort of lifestyle to make sure that they're getting the right advice or the right product at the right time in their lifestyle.

Will Hale:

I think that's a fantastic point because again it is.

Will Hale:

It goes beyond mortgage advice getting to the right customer outcome here and again, the profile of customers that that we see some of them are coming in with quite complex debt problems.

Will Hale:

So having a relationship with a sort of debt management firm is probably a sensible option for for some of those customers to be referred to. Similarly, lots of customers are coming in looking at later life lending because they've got a long-term care need. Again, most of our mortgage advisors aren't sort of long-term care specialists, but there are firms out there that do specialize in that space. So look at referral arrangements with firms that do offer support in those areas. But Martin's entirely right and I think this is a theme that should run across the whole market, not just for mortgage advisors, but the flip side is for ifas and wealth managers as well. Is is is that we've got to think more holistically and managing customers assets and managing their debt is two sides of the same equation and we need to have sort of more cross-fertilization between the the different sort of intermediary firms and advisors in the market in order that we can all deliver better outcomes for customers.

Paul Glynn:

Thank you both. I want to put you both on the spot a little bit and with a different style of question, across some of this. So again, in that decision making process as to how, which parts of the mortgage spectrum do I get involved with and how do I do it, um, the remuneration is different from each end, so how do you balance out that risk of remuneration bias when building a later life advice process? And you know what, what are the things that that then means for a firm?

Martin Reynolds:

I'll jump in quickly on that one. Um, I think it's back to one of our previous questions and answers is about documentation. It's documenting the conversations you've had with the clients, which outline the products that were available across the multiple product sets that might have different remuneration structures, and being very clear as to the reasons why you're advising on that certain one and then having something from the client saying that they understand that and want to proceed with that product. Because ultimately, the commission remuneration shouldn't come into the equation, because it should be what is best for the client. And it's there with the full suite. But let's document it and let's just show the journey that you've taken the customer.

Will Hale:

I think I think from my side there are. There are clearly um remuneration differences between some specialist um later life lending products and mainstream products. So completely agree with martin what we need to ensure as advisors is that there can be sort of no question that remuneration bias is delivering, is impacting the recommendation that's made and that needs to be very carefully documented. But there are good reasons why those remuneration differences exist. A lifetime mortgage, for example, have limited sort of remortgage opportunities. Typically the average case size is a lot lower and that's why the sort of remuneration at outset for some of those products is different. But I would say that for any advisor who is coming into the market looking purely at remuneration opportunities, this for the wrong reason.

Will Hale:

The opportunity is sort of, as we've discussed here, is very different than just remuneration.

Will Hale:

It's about setting up your business to deliver to a to an emerging and growing customer need and sort of aside from the remuneration on each of the product lines, really what I think advisors should be looking at, which Martin's touched on, is more of the sort of legacy planning and opportunity that exists.

Will Hale:

So by talking to customers later in life about their lending needs, it opens up opportunities to talk to their family about their lending needs. It opens up opportunities to think about broader wealth advice and whether you can make referrals in that area. We haven't even touched on wills and estate planning. Again, you know, having a will in place and a lasting power of attorney in place is really important when you're talking to customers about their later life lending needs. So again, that creates opportunities commercially for advisors as well. But when we talk about remuneration and when we talk about commercials, you know my firm belief is that will come if you align your business to delivering to the needs of your customers. If you do that and that's your sort of overarching aim and objective the commercial opportunity will land with you thank you both.

Paul Glynn:

I mean there's a clear steer in in terms of the, you know, focus on the proposition, focus on the customer need and and that emerging opportunity which, which undoubtedly are b2b advisor and firm partners, are. You know, they're all doing a great job to help customers across that lifespan. I think. I think this is natural evolution, as they've got an older customer base to think more broadly about how they better serve those customers. I want to just touch on, finally, the how. So, martin, you've referenced back a couple of times whilst we talked about things like need to evidence the data mine, the importance of CRm and and and technology. So you know, how can firms better use technology to streamline those processes and and and and start to expand their businesses this way, I think, and in particular with ai in the background?

Martin Reynolds:

ai, the favored child at the moment. Um, technology, yeah, we've very much got a thought process of we're very much into developing technology. We've bought a lot of companies over the last 12 months that are going to help us enable to, to improve that technology journey across various markets. But we're always very clear that technology is there but you. It's there to help wrap around the advice process. It's basically there to help advisors do the bits that they need to do the admin, et cetera in a more streamlined way, to give them more time to spend with their clients, to give the right advice. It's about giving those clients a better outcome, the best financial outcome that they can have, and that needs time. And that's where technology is there. It's to help an advisor run their business. Do the compliance aspects, make sure that they can be audited, are there for referral back offer, help them to do the heavy lifting in the wealth space. But the key bit is then also help them managing their business and using it and utilizing it as a sales tool, not just somewhere to put a file on. So there's a reconciliation aspect of it there for the prop fee to go to. It's utilizing that technology to help you run your business more efficiently. That's the key to me.

Martin Reynolds:

The AI bit yeah, we've had AI for years. I think it is flavor of the month at the moment. I think we need to be mindful and careful and I think if you are a business owner and you've got some ip that's your own, be careful. What we you do with ai, make sure that the ars with inside your ip and you haven't put your ip in the ai, because once you've done that, you've lost it. It's not your IP anymore, that's out in the ether and the AI will be utilizing it and giving it to anybody. So it's being very careful with how you utilize AI and what you use it for Thanks, martin.

Paul Glynn:

I said that that's a really strong point for firms to consider Will in terms of AI and wider thoughts on that journey.

Will Hale:

Anything you want to add to close yeah look, I completely agree with martin around the sort of watch outs around ai and making sure you're protecting your ip and you're putting in place sort of sensible commercial contracts with those sort of ai providers. But but but I do think it's potentially a hugely powerful um sort of enabler for advisors. I think it can only be sort of useful if some of the sort of foundations are in place around having structured data. And that comes back, paul, to your point around sort of CRM. But you know just a few examples in terms of how we're using AI in our advice business. It can help on the customer acquisition side, so understanding the propensity of different customers to engage in a process and how to nurture those customers effectively, with providing them information at the point of time which is relevant for them and is going to interest them. So AI can really help with that. It can also help with advisor efficiency, as Martin said.

Will Hale:

So again, we actually go beyond documenting all of our interactions. We actually record all of our interactions with customers and then overlaying AI on those recordings can actually help supplement the file and actually can help produce an automated suitability report which can then be sort of manually adjusted by the advisor, and then AI can help at the back end of the process as well in terms of the quality assurance monitoring. So again, putting an AI solution over those call recordings can help assess the quality of the advice against our own advice process and philosophy and also call out areas of potential vulnerability where again we might want an advisor to probe further or we might want to alert a lender as to a potential vulnerability coming down the line. So, in the right way, as with all technology, you know, ai can be really powerful. But to Martin's sort of counsel, I think tread carefully and make sure that you have the right sort of controls in place before you sort of embark upon that AI journey.

Paul Glynn:

Thank you both. I really I think thought-provoking conversation and, just taking some of the points that you've covered, probably in kind of reversing the way they've come out in this session. I think technology is there to help advisors make a decision as to how they and if they want to enter this market, but definitely there to evidence that great conversations have taken place to to support customers as they embark on that journey. Putting the client at the heart of that proposition, thinking about how that fits with the, the way that they built their wider advice proposition is going to be really crucial, both in terms of taking the steps on is it whole of market or tied or restricted, is it right or refer, and what partners are like, minded enough to build around that referral or support model. But more importantly, going back to the start of the conversation, this is a massive opportunity and one which is going to be increasingly frequent a conversation in in businesses. So I think, well, the stat you started with was by what 20, 50, 10 percent of of all um mortgages will be, you know, for people running to over 67. And, martin, you'd flag that the average age of a first-time borrower is getting older. This is a phenomenal opportunity for firms to continue to engage with customers.

Paul Glynn:

So thank you both for your time today and we look forward to exploring some of these issues in more detail in future podcasts. Thank you. Thanks for listening to the Master Later Life Lending Podcast. If you've enjoyed our comprehensive conversations, please take a moment to rate and review us on your favorite podcast platform. Your support helps others discover the show, so don't forget to subscribe so that you never miss an episode, and follow us on social media for exclusive content. Join us next time for another comprehensive conversation.