As seen in the IFA Magazine.
As advisers will know only too well, each client is unique. It’s not just their priorities and financial goals, but their individual circumstances too.
Because of this, identifying the right solutions – and perhaps just as importantly the right providers for them – can be trickier than it looks.
After all, there will be some providers who are tremendous with straightforward cases, where everything is a little ‘vanilla’, but who might then struggle when circumstances become more complex.
This applies across all sorts of different product areas but is particularly relevant for later-life lending. Older clients can find themselves faced with fewer options than expected, presenting them with a real challenge in raising the funds they need.
Delivering on complicated cases and finding a way through when things are a little less black and white, is something that Standard Life Home Finance has become known for.
The desire to mitigate against future Inheritance Tax bills is one complex aspect which has become more common in the cases we have seen. We see cases where the client wants to combine releasing equity to support their immediate needs as well as provide gifts to loved ones.
So what makes a difference when complexity is the order of the day?
The personal touch
The approach of the provider is vital in these cases, and it’s something that advisers need to be comfortable with. All providers are different, of course, but the ones who excel with complicated cases are the ones who employ a personal touch as a matter of course.
They take the time to really understand the customer and what they are hoping to achieve. It’s only by doing so that the provider can work with the broker to devise a solution that genuinely meets the client’s needs, rather than trying to make an ‘off the peg’ product fit.
Problems can arise with complex cases if this approach isn’t maintained by the provider. The communication may be lacking, leading to delays and a lack of transparency about the progress of the case. Those details can begin to take on greater significance, and potentially cause things to grind to a halt. By contrast, when there is a focus on delivering that higher, more personal level of service, then those potential hiccups and hurdles may be easier to overcome.
Working in partnership
And then there’s the question of collaboration. It’s always important for later life lenders to work closely with advisers; indeed, this market simply doesn’t function without us working together. However, the quality of that relationship and ability to work together becomes even more critical when cases include more complex elements.
By working hand in hand with advisers, providers can find the way through any tricky elements or unforeseen complications and deliver a positive outcome. That focus on partnership makes a real difference to the speeds involved too. Being rapid is always well received by brokers and their clients, which is why it was so pleasing to see Standard Life Home Finance receive the highest rating among later life lenders for speed to process applications through to offer in the most recent Smart Money People Mortgage Lender Benchmark for H2 2024.
Prioritising providers who work collaboratively as a matter of course, rather than only when it’s most necessary, will put advisers in a strong position.
Making flexibility count
It’s not just on the underwriting side where flexibility is so important, but the solutions themselves. The later life lending market has seen great innovation in recent years, delivering products which are far more flexible and adaptable, so they better meet the needs of individual customers.
For example, the ability to make repayments towards the lifetime mortgage has become commonplace across the industry, a powerful option for those keen to keep the eventual cost of borrowing as low as possible.
Individual providers are devising further ways to adapt this idea, and appeal to different types of customers. At Standard Life Home Finance, for example, we have our Horizon Interest Reward lifetime mortgage which offers customers a discounted rate for the duration of their lifetime mortgage if they commit to making set monthly interest payments for a specified term.
We’ve seen great strides forward in the range of early repayment charge periods on offer too. The days of clients being locked in for a long period as standard are now gone – advisers have a far broader suite of time periods from which to choose, ensuring they can craft a solution that truly works for that specific client.
Accepting the new reality
The fact is that complexity isn’t going anywhere. If anything, advisers may see a growing number of clients with more complicated elements to their finances, and who need more nuanced support in identifying the right solutions and providers for them. The desire to keep Inheritance Tax bills low is a great example of the types of scenarios that advisers are going to face on a more regular basis.
As a result, it’s crucial for advisers to identify the partners who not only understand these circumstances, but relish the challenge of developing a proposition that meets the needs of their individual clients.
Written by Sanjay Gadhia, Head of Sales at later life lender at Standard Life Home Finance
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