Equity release industry: working through lockdown
- 36 mins 30 secs
- Hattie Tales, National Account Manager, Pure Retirement
- Matthew Taylor, Senior Business Relationship Manager, Equilaw
- David Burrowes, Chairman, Equity Release Council
- How the equity release industry is working to protect vulnerable clients as a result of lockdown and social distancing
- How to factor in altered timescales for completing business in the current environment
- The pros and cons of doing business remotely: from legal work to property valuations
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In order to consider the viewing off this academia learning unit as structured learning, you must complete the reflective statement to demonstrate what you've learned and its relevance to you. By the end of this session, you should be able to understand and to describe how the equity release industry is working to protect vulnerable clients as a result of locked down and social distancing. How to factor in altered timescales for completing business in the current environment, on the pros and cons of doing business remotely from legal work to property valuations, please completely reflective statement to demonstrate your CPD Hello and welcome to this Academia Learning Unit on equity release. In this particular program, we're focusing on how the process could take place in a world of social distancing on lock down. Taking part in the discussion We have details. Who is national account Manager up your retirement. David Burrows, chairman of the Equity Release Council. A Matthew Taylor, senior business relationship manager. Ecuador had, he tells, tell us about where pure retirement fits into the equity release market. What are some of the big issues for you as a business in the current environment? Sure, So we are an equity really specialist, so we only actually do equity release lending. So it's remained incredibly important to us to ensure that the products that we have available in the market, even during the covert 19 crisis are still market leading not only with the lowest interest rates, but to ensure that we still have great features, great flexibility and great options for our clients. We have ensured that are so the standards remain some of the highest in the marketplace on Do you know we'll talk about some of the challenges that we've had to overcome, but we have made we have had a real commitment to ensuring that we turn things round still as quickly as is possible, even during these times, some of the things that we've had to overcome. Andi sure, we'll talk about these in a lot more detail. Such things like the changes to the legal process, ensuring that actually fits with us on by ensuring that the client is still a safe as possible during this process. On one of the biggest hurdles that we've had to become as a lender, um is looking at the change to desktop valuations as the property valuation is so important during an equity release transaction. Okay, Thank you. David. Bar is what What sort of issues of being thrown up for you at the Equity Release council right now was against were absent well over 1000 individual members in over 300 firms and that that covers the expense of providers off distributors, which include advisers and lawyers and indeed, surveys in New York. You know, the reality is that with much of the the work of commodity to lease, being before we got into this so locked down period was essentially more face to face on particularly so in relation to the legal advice. That's a key stand requirement that would normally be the case it spent. That is not business as usual. And so there's along with obviously the rest of the economy. But particular planter services on particular English to release there was obscene initial. They impact on how we're going to carry on the pipeline, particularly to face to face advice and so obsessed that it'll melt in a deputation made by this like pure and others and on, and that was really welcome. But we then had a particular issue that will it outcome go into more detail about the ST Matthew make love in relation to a gold standard off providing independent face to face about? Annette would often happen that so the home and that we're talking about an older consumer or otherwise in this listed officers. So that provided a key challenge to us. Retreat sort to overcome. And that's what we're talking animal teacher we were able to pay with The in ST Collaborated together provides the temporal modifications those Wall Street provides in this acceptance situation. The option of promoted bites. Well, let's bring you in. Matthew 10. It sounds a little bit about equal or on how you having to adapt to the circumstances were all facing a to moment. Thanks. Mark. Yes, Ecuador were specialist actually really sisters so, But that is what we do. In essence, we serviced thousands of crime teacher each year through the record Julie's journey to make sure they understand exactly what the mortgage contract looks like. Andi, they are making that decision out their own free will. The biggest challenge dresses and state has touched on these Andi, the gold standard approach that we would always see a climb face to face throughout the process. Most of those meetings will take place in clients. Homes with have some have become come to the options to me as to to go through their paperwork there on Bob See that's needed to be changed on with a slightly different approach. Can't sort of relax rules slightly, so there is an option for clients to be seen remotely. However, however, we really have not to use that as of yet, are mobilised listers on. They've needed Teoh have a change in terms of how they operate and have a seat, clients and lunch that process. And then, ultimately, we've needed to make changes in terms of have appointments booked on where we do those meetings that were making sure the clients fully briefed beforehand. So I'm your question journey of the last in 345 weeks, but and we feel like it's better to redress process that's allowed us to. I'm getting to transact business, and that's not possible. I wonder just before we moving on what's happening around this thing. This whole issue of locked down and social distancing. I want to get a bit of a broader sense of where the equity released market is at the moment. David are gonna can't come to you on this. First, you see, look at the sort of the longer term transmitted. We've heard a lot, for example. But people were delaying decisions till after things like Brexit became clear. Can you talk us through? What's with the longer term trends are in the market of the moment. Yes. I mean that the trend said in our market has bean ah, trend that's up on. Do you know, way saw the course before we went into this coronavirus crisis. We walked over a £1,000,000,000 of the book You of being access by Italy's pull ups on that of Mr last year, that sort of 40% increase particularly. There's also on the ground reality that some, as had alluded Teoh protests, become ticket competitive interest rates work at an all time circle. No, Andi, also the number of products a choice was at an all time high. So we could call went into this period of time in ah, a resilient and strong position. But it's posed a way through, and that's what the council's being a waste about is being showing that our standards, which are really very much a call, are fit for purpose. And those really seeks Dr Good consumer outcomes on and particularly when we're dealing with. Actually, switch is an important choice to make its, um, There may be some strong term needs that around about seeing in front day today living care, debt repayments or maybe some emergency house repairs. But really, it's a long term choice, and so we're seeing very much take 1/4 view on 30 services. Not only do we think we have really good protection on, and we are, one was highly regulated of a very Spencer hospital, so it's alongside decision. And so it was built resilience to the shocks that may affect other parts of the industry, but less. Obviously, we can talk in more detail about what the impact is being off this crisis. But certainly we we got in, we will into the spirit with yes, sort of the coast specs. It's surgery, make a lot of boys spunk. Whichever way you look at it, we there was certainly a some pent up demand pats that was released in the first quarter that we saw a good effect to consumers, okay? And I had a pure time. Youth. Do you think that business is going to slow down now or do you think that, You know, even though we're in a somewhat unusual environment. So these longer term trends that David has touched are gonna keep playing out. Yeah, So I mean, the reasons why people are actually coming to us to release funds. The reason for that they're not able to actually pursue that and continue with it. So things like home improvements. Eso you know, people want to replace that kitchen if they want Teoh book a holiday. There's a lot of absolute people holding back on that as well, you know, new cars, new, even purchasing a new house themselves. So a lot of the reasons and a lots of trends that people actually come to use an equity release their no, actually able to complete that at the moment. So it's not necessarily a case of people saying that they don't want to do it, or they're gonna hold off. They can't actually completed at this moment in time. So even when there have been the discussions with the financial advisors. They can get things in place, but it can't actually completely eastern his actions. So we're seeing an impact there. Um, obviously with some of the changes to the products in response to covert 19 and happened to change the process, we have actually changed some of the boundaries as to what property types are acceptable on LTV's on, um, a strong as they were prior to cope in 19 and things like that. So it might be that, um, products aren't suitable for some people as well. So, you know, I must say it's been incredibly impressive as an industry that we're in a position that so much business can continue. Andi have been up to change a, really, you know, cemented process in a really short space of time to enable us to carry on business on For a lot of clients, it is still very, very much a suitable. But we are going to see the drop off from the clients where they're not able to actually complete what they needed to do on also, if if their property doesn't fit under the new the new guidelines. Okay, well, this this brings up the issue of how you operate remotely. So Matthew, could you talk us through what? What the rules have been up till now, where it comes, the legal process and advancing and what the what the changes in the options are that are available. So in simple terms, up until the start, or once said that the covert situation we're in on wall clients would have had to have been seen place the base by the celestial lawyer. As I mentioned Ecuador, we do most of those meetings by I have visit. So when way have troubling sisters that would come out and meet clients in the comfort of their own home? I'm really convenient, really safe I am and alliances to transact business. Nice and quickly, however, since, and the sort of social distancing rules and government protocols around hygiene on how that meeting needs to look on, we have to change the process on Do you think? So? You definitely. So we've adopted a concept this appointment, where clients would be seen across driveways in gardens, three windows. We've got some to really funny stories where, insisted the common picture, better shopping as well climb. They're isolated and haven't seen anyone quite well on. By and large, the feedbacks being really, really positive, quite alike. It means that we can organize the meeting for them without having to eso the delay or postpone the at the actual equity release. It's in process, so we do have a remote, remote option. No, there isn't a sort of a way of us conducting business where we would only speak to the clients by phone, email and video call. The big challenge for them is that they will need to find an independent witness day because the mortgage deed itself still needs to be witnessed by somebody who's not family member. And they can't be benefit benefiting from the Equitable Easy. That s so if a client's objective is to not see anybody during lock down actually can't achieve that if they get on the state of Henry because it's still gonna need to find a neighbor or friends come and witness that mortgage deed. So I want to explain that process to clients. We found that most of the Hackett's proceeds on the concept that's basis on we really haven't too much pushback on. I would sort of echo that the comments of Fatty and David. So far, we've seen a bit of a slower of new cases coming in. But the pipeline work that we have clients is still quite eager to get those over the line. So what? It's being a challenge for us, the ability to still conduct business in this simple strength ful. But where has been really poor? It's just on. If I were to go down the remote option with you, like Like what? We are at the moment having a cop conversation, uh, over the Internet, I would need you could be in your office. I could be the client in my house, but I would need to have at the other end of my so far in my living room, assuming we're conducting business in my living room of two meters away. 1/3 party independent witness to the to the conversation we were having over the Internet, the witness would only need to witness the signatures being applied to the mortgage steed, so that could be done. A different point in time doesn't need to necessarily be done. We're getting the advice to the client. So in really simple terms, we would have a multi layered approach. Where there's a visit is a une increase in touch points with the customer to make sure that to the best of our knowledge, were assessing capacity correctly on. We're checking that they are making decision up their own free will. There's no dress they would then need to find this witness. We would need to speak to the witness and, ideally, video call them as well, which is being quite barrier to some. To some customers. They don't want the neighbors knowing, For example, they're taking out a mortgage. The mortgage deed will show the lender on that, so it's not take too long for them to be up to Google that and find out what they're up to. Andre. More importantly, there on, be sure getting the people that back to this has become quite problems. Well, it stands to the client to execute the documents correctly, so we would expect a large majority of those document packs to come back actually, incorrectly have been, which means more time, a more involvement from from all parties. But yeah, there is an option for us to give our legal advice remotely. There's just an awful a lot more going on behind the scenes to to make sure it's safe and secure what they want to get your thoughts on it. Obviously, you've been helping to push changes through. But as ever with like the devil's in the detail, how do you think this remote processes is likely to develop? Be refined over the next few months? You say of the council, I thought interested together, particularly T lawyer members, to be able to ensure that we had the option off this remote device. Because there's there's a range of different ways that, in ordinary times, speak advice has been provided you have been which they're specialists, providers, leader, vice like equal orders. I will say we would could only be honestly giving their advice through our at the home, off the of the consumer, the clients. There's others who would ordinarily have gone to the high street partition of the many in all shapes and sizes of difference listers. But do you just simply turn up at High Street normally to girl Teoh get device in a battle she has to continue. So what we wanted to do was ensure this sufficient flexibility with this remote advice. And so the main thing was that we got good collaboration from the streets to ensure that we have this consultation on what came out. It was yes, there was a real were from reaffirmation of this gold standard we ordinarily really, really want the face to face. I see little possible on. Look at the options available in many spoken. That's how using invertebrates is trying to keep that still available. But when there's many, you won't do that. He wants to keep the gym open. Smell to police for they said, a high street practitioner, to be able to provide that remote option associate being putting a week, we want to depress him and we are consulted owning these street, but also with the regulators would be if she a with the lost starting on others. We want to ensure that you know, not saying that that we were on these exceptional times, that we really kept at its core heart, that the principles off the off the wall. And so whilst we're having this temporal creation, that is a temperature. What we want to better come answer it back to the gold sentenced irresponsible. We really wanted to ensure that we continue to safeguard consumers and where the key aspects of this in bed about sister insurance was no undue duress. That capacity issue is dealt with, and that really knows what they're getting into, and that needs to continue you even in these are made soon. That's his. Especially I think we want to emphasize is that it may not be the time to go ahead with things. And I was talking about that. Let's there maybe this set element of pressing the course. Batson not least issue, You know, if you want to head home adaptation, you may well, not one suit, necessarily. He won't be ableto do that this time off social distancing. And you may just want to wait, but also, if there's any concern that the lawyer may have been relation Teoh three aspects of class to address or correctional the Michael the vulnerabilities of consumer. There's also very much, as always, has Bean that the time to not continue, and that's particularly important in these times when they met because the client major saying, Well, hang on, I want to wait until I can get the gold standard face to face advice. And so we want to build additional checks and balances and, in fact, that the the temporary modification process has actually that's two additional man to treat. Concept wants to go to check this out because, as Murphy said, this still the very to become a such a relationship, providing that independent witnessing with mortgage deed, which still is the heads. What has is a product provider, what, picking up on that. But what can you do? What else? We're all operating rather remotely from each other, too. Ensure that particular honorable clients are supported and that they're getting the best outcomes. Yeah, definitely. I mean, we have been huge, huge, huge supporters off the changes to the legal process from everybody in the equity release industry. The most important thing is ensuring that consumers are doing their equity release in the safest way possible. Eso everybody still must have that independent legal advice. Um, it's been interesting to see the way that the advisers have have adapted to this eso using things like doom and video calling really sort off changing the way that advisers are interacting with clients s. It's been really interesting to see how a lot of these little traditional advisors who perhaps would do to face to face meetings with the clients and now using different methods. But I think one of the interesting things is seeing how, um, we kind of realized that these tools are really effective and it is going to change the way that we we work moving forwards. So the 11 invite level of advice is as strong as ever. Eso, even if they're not able to meet the clients in person, you know the level off advice on the way that they're interacting with close is as a send as strong as ever has Bean, and they're still receiving the same level off information. As we said the legal process, we can make sure that they're fully fully understanding exactly what they're doing on A. It's like Matt said. There's no a huge change in the way that they're actually receiving the information from the solicitor or that the solicitor are assessing the situation. Um, it's just that they're having to do it more of a distance. So from from a lender point of view, ASL longs. The clients are receiving that level of of advice they're getting that face to face meeting with the solicitor. You know, from our point of view way we're providing as much support as possible to the advisers in the marketplace. But do you think having there's this? We're in a period where there's just gonna be a greater chance of some tail risk People down the line saying that you know, 2020? Given the circumstance, it was just it was, you know, it was an easier time for vulnerable people to make suboptimal decisions. A za providers. You look at the book of business coming through or potentially coming through. And to David's point, you know, sometimes the best thing might be to just leave it two or three months. Is that a concern you have? No, it's no at all. Know if you know this. This industry we way. We do absolutely everything on all of the steps that we take with the client are to ensure that the client remains safe at all stages in the process on during the slot down period. There's no change to that whatsoever. Um, you know the client is receiving sufficient advice adviser stage. Azzawi said. The legal process is still incredibly robust on ensure that there is no danger to the client lead. As Matt said earlier, they can still fully assess whether there's any dress or any. Um, you know, anyway, that the client isn't understanding the project in full, So from our point of view, we don't see it as any risk way. Believe that all of the steps that we've made, we've made them in exactly the right way to ensure that that customer remains safe for all times. Well, Matthew, what sort of pick up things are taking a little longer? But what does that mean for something like the land registry? What two advisers just need to be aware off when they're thinking about their timings on putting climb business through? Yeah, I think that Sen that's going in pimple into the concept for advisors together, head round at the moment is we are in a different world. Things are taking longer, and then they did predator to the code situation. So a lot of work that I've been doing over the last 234 weeks is around adviser education on You know what can help the process up that that's their parties and other stakeholders. We're not gonna have much control on, for example, alone. Mystery issue mentions on, you know, there are delays there. We know what these delays are so we can help sign post with clients and manage expectations. There were trying to get advisers to front load as much information as they can to us as well, things that were redeeming existing mortgages. We need to know and account numbers and who you about, but basically on Bernie on because in some instances, 10 12 13 working days ago and by before we can actually get redemption statement. So I think from up would you? It's really trying Teoh engage with brokers early on in the process to discuss the particular case. They may have identify ways that they can help support in terms of getting that case complete as quickly as possible, but also managing client expectations So well, um, understand, sort of roughly what kind of time frames we talk the brand promote. I can David. What comes to equity release there. Obviously, those have already in the market, but is now a particularly good time for people who aren't advisers who haven't been involved in equity Reese released to get involved or are these slightly unusual times, and you'd be better advised as an advisor toe wait two or three months before coming into the market? I think so. It's a good time for advisors to to look at the B shoe of introduce because on what we're finding is that the market is evolving from a consumer point of view. They don't want to see any wrong front door. They want to get help in their later life in their retirement planning. And where we're recognizing that people are on advisors are coming in from maybe traditionally a residential property market and that way recognize it. That's store to the moment, providing mortgages then that's Endo otherwise, from a wealth management point of view. And so I suggest that, particularly in the police, that the pipeline is continuing, orbiting different circumstances. Now that actually is a really good option to look at and perhaps to either dust down the old egg to lease gratification that thousands haven't actually used and to recognize that it's a time for refreshing courts to get up to date on what that really means. In the new the bone that we're in with the actually smoke it. Otherwise, look, it is the first time and see whether that could be added to ensure that the customers able to be referred to those specialists provide this advisers so that everyone knows much more eggs. Actually, market is very different from just several years ago. On has so be different, quite options available and provide Smith much option and competitive rates for consumers say. Certainly some would say We always say in Councilman and all members do that. It's an option. You need informed advice, both financial and legal, and it's so important that those people who just have just looked into it that they know more about. It's only going to get more knowledge base or and somebody in fact, want to take that qualification. Then do you get the get um, authorized to be able to provide that nice? We'll have given David's refer to this greater choice, but with that comes more complexity knowledge that you need. What a product providers can you give us an example of what you as a product provider of doing to support advisers who were really trying toe get their skill set up toe up to, uh, up to the right level in this market today? Yeah, absolutely so. Especially ourselves, that pure were really, really passionate about giving back city advisers on. We are a market leader in leaders and sort of advices report. So anyway, that we can we give us much support to advices as possible. We've built the biggest sales team in the industry. Um said we have three. BDM is out on the road, who in normal circumstances will spend 4.5 days a week out with the advices in person, doing training sessions, training courses, meeting one on one with the vices to give them a broad knowledge not only on our own products on the market itself on do you know, giving them as much as they need. We also have three telephone business development managers at the office as well. Who are there, you know, all day, every day to pick up the phone, answer questions, answer queries on. But we also have relationship managers as well. So we've built this really big, strong team because we really understand the importance. Um, of advice is being out to speak to you. Speak to experts speak to us about our products and to ensure that they are fully informed. I'm fairly up to date whenever they need to pay. We're really passionate about supporting events during the lock down process. We've been holding a weekly educational zoom meeting as well, which we've had a fantastic turnout to as well. So I think it's really nice that advisers are still engaging with learning they're using this time and lock down where perhaps they are quieter, um, to actually up skill on do you know, get a better understanding of the market so that could be experienced advises Or, as you said, advisers that are looking to gain new information. So those meetings have been really good. I have Personally, I've been invited to speak on a huge variety off. Also, So zoom meetings or, um, video video technology meeting So across the marketplace, where that whether it's the clubs, I know the council have been putting on regular events as well eso across the board. Everybody's really been backing the advises, using this time to A to engage with them because I think during locked down, it's more important than other. That way we're engaging with advises, keeping in touch on keeping that point to contact on, Be given them the opportunity to upscale Matthew Tailored equal What you doing? T support clients and potential providers of business online House. The model changing on well for us that the last few weeks YSL been about engagement with advisers as the fattest mention. So I've probably not spoken to as many different brokers is happen on the last mental. So some of that might be because their home and they got a bit more time Teoh to make those cause. But the advice is, do what information I think now is given that the time Thio thio contact providers on lenders and legal side to understand the process a bit more to really drill down on on what we're doing, why we're doing it and what they can do to help terms. It's on progress in the case. Three. We just recently recorded a short ish set off Q and A's so advices can access the information around the state home process. The pros cons more. We need to consider how they can position that with the client a frump, so that's gonna be going life for them to be able Teoh View and Digest when I have time. And how do we talked a lot about trying to work remotely the legal side? But does it throw up any problems for you as a pro provider when it comes to working out the valuation of properties in first place? Yes. So that was the biggest hurdle for what it provided to overcome. So when taking an equity release, there is actually no affordability checks that the clients. So the most important thing from a funder and lenders point of view is the the value of the property and ensuring that we value it accurately. Eso moving from a physical valuation to a desktop valuation was the biggest hurdles for us to overcome. Really, Priest say that we're in a brilliant situation now where across our whole public range, we are now on desktop valuations on it's a really nice for best solution. Um, the way that they're able to access really good specific information about the property. They've got a really nice adapted software to enable them to really pinpoint that property. They can use street view on satellite images on Also, they've got um, really nice bank of information coming through from right. Move this well to enable them to really doubt to make anak your evaluation off that property. Um, I think, um, you know, it's it's one of the things that we probably have, um, probably have the most conversations about with brokers directly as they have a real concern that perhaps it means, because it's going to desktop, that it's gonna be down valued. Perhaps it's no experts in the area that are now dealing with those particular properties, but that's not the case at all. Is area experts that are still carrying out the valuation on these individual properties. So is somebody that knows that area. They know the values they're used to dealing with those kind of properties. They've probably worked on those streets 100 times before, so it is still an area expert. They're able to use really good bespoke technology to really drill down into that particular property and get a really good, robust evaluation of that property way. Talk for a lot in the course of ourself, our almost out of time. But I just wanna get a final thought from each of you about. If you're in advise when you're thinking about what you should be doing in the equity release market in 2020 that's a key thing to focus on. David borrows its come to you first. I think the the issue is that whether one is in this extraordinary period or not, that equity release has important. But let's play. I mean, if one takes so back then one of things that over 50 fives this works for employment. Trillion pounds worth the record. See, in order to be a lot. So there's opportunities there, but we always seem to emphasize. And it's the case, of course, all our members that we really put consumer protection first and particularly in these times that were in that we all recognize this is a long term position, a really important on transition that has really great, relevant stealing with a variety of needs for consumers. And we see the that need that demand will only grow in time. But we wanted to make sure that I think it's been emphasized, at least in this conversation around legal advice, particularly that we're putting consumer protections heart with adapting with modifying revolving is the markets, and it's an industry. But we're really ensuring that we are very clear that our standards matter gravely, and we're gonna make sure that those soffit for both this weather in this extraordinary boy in the future they get Matthew Taylor's as our lawyer on the panel. If there's one thing advisors should be doing that's gonna make the job much easier for them and, more importantly, their clients, what would it be? And while I think the potential for there to be more clients looking, our equity release options in the nearest future is was definitely going to be a possibility so engaging with their lawyers, you know, making sure they understand any particular tricky bits of legal where they need to be completed prior to completion. Andi sign posting that with the client early on that the biggest crumble we get is probably where the advisor has over promised in terms turnaround time. So if we could all have some straightforward dialogue around back then, I think it's only gonna improve my journey and be back for radical medicine. Okay and Happy tells a final thought from you. Sure, I think one of the most well as Well, one of the biggest conversations I've been having over the last few weeks with advices is used this downtime to grow your business. So use this opportunity to engage ways potential thermal partners with potential clients. Um, you know, up your game on social media, develop your website. You know, really give yourself a strong standing so that a during locked down, you're growing a business. You're growing your awareness. People who may not realize that you actually worked in equity release now realize that you're working equity Release on. Then once lock down was lifted. You put yourself in a great position so that once you go out there as David said, the demand is going to increase. We are going to be incredibly busy. Make sure that when people are researching equity release advisers, when they come across your website when they come across, your social media is impressive. They've got your contact details on that you're able to maximize on that business. Once locked down is lifted. We have to leave it there. David Burrows had details. Matthew Taylor, Thank you for joining us. Thank you. Thank you. In order to consider the viewing off this Academia Learning Unit has structured learning, you must complete the reflective statement to demonstrate what you've learned and its relevance to you. By the end of this session, you should be able to understand and to describe how the equity release industry is working to protect vulnerable clients as a result of locked down and social distancing. How to factor in altered timescales for completing business in the current environment on the pros and cons of doing business remotely from legal work to property valuations is completely reflective. Statement to demonstrate your CPD.