How the Consumer Duty could affect equity release marketing

Thomas Brett, head of mortgage and lending at Contact State, shares research surrounding how consumers apply for borrowing online and their attitudes to sharing data.  

It’s important to remember that the Financial Conduct Authority has given to the end of October as the deadline to have a formal plan in place on how firms expect to adhere to the new Consumer Duty regulations, just in case they decide to audit you. 

We know the new regulations will be far-reaching, and one important element of this will be, ‘how will this affect marketing for new equity release customers?’ 

That’s why Contact State has commissioned its inaugural Data Control Matters report into how consumers apply for borrowing online and their attitudes to how they share their data. 

The report goes live in full next week and will be available via our newsletter first, you can sign up here.  We believe the stats in this report will inform how customer acquisition will work in the next five years which gives an exciting opportunity to brokers to optimise their customer journeys towards advice. 

Some of the figures which have emerged from the report are staggering: 

  • 63% of over 55s get just one quote 
  • 62% of respondents are reluctant to share their data online 
  • 73% of over 55s say they have had a negative cold calling experience in the last 12 months 
  • 30% admitted to being cold called over 10 times in the last year 

Our findings suggest that concerns about data are creating a real disconnect between over-55s and mortgage and equity release brokers who rely on online channels for their leads. 

And it seems those concerns are well justified, given so many older borrowers have had negative experiences, particularly when filling in a form or calculator online, and expecting to get a quote from one company, and then finding they are being called by someone else. 

The trouble is, these online forms and calculators are how so many mortgage and equity release brokers get their leads, and if over-55s are having negative experiences using them, they are much less likely to buy when they do eventually get put in touch with someone who can help. 

As we know, equity release has had reputational issues in the past, and the hard work from the Equity Release Council, brokers, lenders and solicitors are changing this slowly, but more needs to be done. 

If a customer agrees to advice, then they have largely discounted the negative image of these products. The problem starts with misleading advertising which puts potential customers off from enquiring in the first place. 

Proving where your customers have come from, not only covers you from a Consumer Duty point of view but will help inform what the customer actually requires. 

If we gain full oversight of the customer journey, from the first advert seen, all the way to post advice care, we improve the reputation of equity release whilst providing better outcomes for customers and that’s good news for everyone. 

  • The views of contributors are not necessarily shared by the Council. 
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