Ten-year challenge, ten years of change.
Matthew Phillips reflects on his first decade in the industry after he was named equity release adviser of the year.
The start of the year can signify a time of change and a fresh start for many people, it can also be a time for reflection on the year, or years gone by. As we start 2020 social media is awash with photos illustrating how people have changed over the last 10 years. This got me thinking about the change that I have seen in the equity release market over the past decade, as 2020 also marks my 10-year anniversary as an equity release adviser at Age Partnership.
When I think back 10 years, I was a 23-year-old wearing a leather tie and sporting a questionable haircut. Back then there were only around five lenders in the market and approximately 15 plans available for our clients which, when you look at the choices they have now, seems unbelievable.
I do feel fortunate that I began my adviser career when there were limited numbers of lenders and plans available, as I was able to gain a deep understanding of lender requirements, which I feel has given me a good foundation for my career.
As the market and number of plans have grown over the last 10 years, I have been able to grow with them. Each time a new plan comes into the market I do my research, learn the plan features and requirements inside out so I am fully equipped when it comes to giving my clients advice. This level of knowledge and understanding has been very beneficial to myself over the years as it means I am able to confidently recommend plans that best suit each one of my client individual requirements, whatever they may be – from proximity to commercial premises, to properties in flood risk areas, or even clients that have too many gnomes in their garden. Yes, a lender did once decline a case due to the number of gnomes in the garden!
My advice to advisers just starting out is to learn the products inside out. I know it must be daunting to have over 400 plans available but having a sound knowledge of the products and lender requirements will be invaluable for your career and the level of advice that you provide to your clients.
When I think back to my clients 10 years’ ago they were very cautious about equity release. There were constant references to negativity that they have seen in the media or from family and friends. They didn’t really understand how equity release works and would say “I don’t want a mortgage” when I mentioned a lifetime mortgage. And they seemed guarded about discussing such an in-depth level of personal financial information during the equity release process.
Fast forward a decade and the level of understanding that clients possess is testament to the hard work of the Equity Release Council, brokers and lenders alike. There is so much information available to the general public about how equity release can form part of their later life financial planning. I now get clients coming to me saying that their friends have told them to speak to us due to how great equity release has been for them. In the past equity release was a taboo subject for clients to discuss, they were almost made to feel ashamed about it. I now have clients where their family is actively encouraging them to take out Equity Release in order to allow them to have a better retirement. No longer do clients tell me that they don’t want a mortgage or that they feel they will lose their property. Equity Release is now no longer seen as the last resort to clients and they see it as part of their core financial planning.
The wide variety of products now available makes my job as an adviser much easier as clients have much more flexibility with options available to them. They are now able to make ad hoc repayments, fixed payments, pay some of the capital back, all of which weren’t an option 10 years ago. These developments give clients more control over their finances, which excites me.
Finally, we can’t talk about the changes in the equity release market without mentioning interest rates, they were over 6% when I began my career, and lately I have been advising clients on interest rates below 2.5%! If you had told me 10 years ago that interest rates would go below 4% I would have taken a bet that it would never happen. This means the cost to the estate is so much lower and gives clients more confidence about the equity left behind for their beneficiaries.
Over the last 10 years I have been fortunate to be in an area of financial services which has experienced unbelievable growth and change. I feel very privileged to have helped so many clients undertake equity release and change their lives in a small way for the better. I look forward to my next decade doing a job I am passionate about and hopefully the next 10 years will be as good, if not better than the last.
Matthew Phillips CeMAP CeRER CeSRE DipFA
Senior Equity Release Advisor & Advisor Development Manager