A significant number of financial advisers lack full confidence in meeting Consumer Duty obligations when advising on later life lending, according to new findings from Key Later Life Finance.

Research carried out by the equity release adviser across a broad base of professionals — including wealth managers, later life lending specialists and generalist advisers — reveals that fewer than half (45%) are very confident they are currently meeting their regulatory duties in this growing market. An additional 41% said they were “quite confident” but acknowledged that improvement was needed, while 16% admitted to being only slightly confident in their ability to meet the expectations of the Financial Conduct Authority’s Consumer Duty.

Despite these concerns, the market is viewed as a strong area for growth, with 74% of respondents expressing concerns about regulatory compliance even as they recognised the opportunity. The findings suggest that, for many firms, aligning their advice processes with Consumer Duty expectations remains a work in progress.

“Clients should be advised of all their options under Consumer Duty if good customer outcomes are to be achieved”

Key is calling for a more rigorous and transparent approach across the sector, beginning with the universal adoption of call recording for all meetings involving clients over 50. The company believes this practice — already a requirement under Equity Release Council Standards in certain contexts — should be embedded more broadly as standard good practice.

“Clients should be advised of all their options under Consumer Duty if good customer outcomes are to be achieved,” said Will Hale, chief executive at Key.

“Advisers who are concerned about meeting Consumer Duty obligations should be aware that there is support available to enable them to be fully compliant.”

According to the research, some advisers have already taken steps in that direction. One in three (32%) say they have introduced mandatory call recording for later life lending advice to strengthen quality assurance processes. Others are increasing transparency in product education: 36% now provide more detailed explanations of compound interest, while 37% are clearer when discussing the potential benefits of making repayments on equity release plans.

Hale said the onus is on advisers to ensure customers are fully informed about repayment options, affordability, and how personal factors such as health and lifestyle might influence the loan-to-value or rate they are offered.

“Comprehensive conversations around what a customer may afford to repay to optimise cost of borrowing and or how health and lifestyle factors may positively influence the rate or LTV available are crucial if consistently good outcomes are to be achieved,” he added.

He also highlighted the benefits of embracing technology such as call recording not only for compliance but also for improving client service. “Recording calls is an efficient way of clearly evidencing a consideration of all options and can protect both advisers and their customers from future issues. Also, recording all meetings opens up other exciting opportunities to use AI to drive efficiency and productivity benefits and to improve customer experience.”