A significant proportion of financial advisers are routinely turning away potential clients seeking later life lending advice due to a lack of confidence in their ability to offer suitable guidance, according to new research from Key Later Life Finance.

The equity release adviser found that nearly 40% of advisers surveyed admitted to regularly declining clients interested in later life lending, while a further 46% said they occasionally did so. Only 16% reported that they rarely or never turned such clients away.

The findings point to growing unease within the advisory community about the increasing complexity of later life lending products. Key is urging firms not active in the sector to establish referral relationships with trusted specialists to ensure their clients still receive appropriate advice.

VARYING CONFIDENCE LEVELS

The study, which canvassed the views of wealth advisers, general advisers and over-50s specialists, suggests that while the majority of firms are engaging with referral networks, confidence in these arrangements is mixed. Around 86% of firms questioned said they refer clients to a later life lending or equity release specialist at least once a month. Yet only 49% said they were very confident those clients received the highest quality advice. A third said they were only “quite confident” and 15% admitted to having little confidence in the outcome of their referrals.

Will Hale, chief executive of Key Advice, said: “Help is on hand for advisers who want to work directly in the later life lending market through the sourcing and research tools available and with the professional development resources and support provided by lenders and through networks and mortgage clubs.

“Putting in place referral arrangements with trusted specialists is the best option for advisers who do not want to expand their proposition but still be able to ensure that all options are offered to clients. They need, however, to be very confident that the referral relationship will produce the best outcome for clients.”

Hale also highlighted that the referral model works both ways. “Setting up referral arrangements can be equally important for equity release specialists who perhaps do not want to cover mainstream mortgage options or have customers who may benefit from expert pension, tax or long-term care advice,” he said.

“Referral relationships can ensure firms fulfil their obligations under Consumer Duty while also improving their service proposition and creating a new income stream.”

The research, commissioned by Key Group and carried out by 3Gem Research & Insights, surveyed 200 advisers and was completed in October 2024.