Recruitment and retention challenges across the mortgage advice sector are adding to the pressure on firms to diversify, as recent FCA policy changes risk driving more consumers towards execution-only borrowing.
According to later life lending platform Air, advisers could counter this threat — and secure stronger margins — by expanding into later life lending, an area the company describes as a major untapped opportunity for intermediaries.
FCA data obtained via a Freedom of Information request shows mortgage adviser numbers fell by 11% last year to 31,524 — the steepest decline since 2009 and the first drop since 2020.
Air warns that adviser numbers could fall further following the FCA’s latest policy statement (PS25/11), which could make it easier for borrowers to access mortgages without professional advice.
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Air argues that many firms are overlooking the later life lending market, despite its scale and potential. The platform says supporting advisers to qualify and specialise in this area, with proper tools and ongoing training, could attract new entrants to the profession, improve customer outcomes and strengthen profitability.
Industry data shows that homeowners aged over 50 hold around £3.7 trillion in property wealth but often need help managing borrowing and financial planning in retirement. An increasing proportion of mortgage terms now stretch beyond traditional retirement ages, suggesting this segment will continue to grow.
The later life lending opportunity is being further boosted by estate planning and intergenerational wealth transfer. From April 2027, unused defined contribution pension funds will be included in inheritance tax, a move expected to raise £3.44 billion over three years.
At the same time, parents and grandparents are playing a growing role in property funding, having gifted or loaned £9.6 billion last year — £38.5 billion over the past four years, up from £22.5 billion in the four years prior.
Air says that modern lifetime mortgages — which can allow borrowers to service all, part or none of the interest, and make flexible capital repayments — are increasing both the complexity and the appeal of this type of advice. For advisers, the firm believes this presents an opportunity to differentiate through deeper expertise.
Air’s own training and development platform, the Air Academy, offers CPD-accredited content, LIBF-recognised learning, live events and resources aimed at helping advisers achieve professional status. The company reports that advisers who complete its professional pathway record three times as many completions as those who have not undertaken equivalent development.
Will Hale, chief executive of Key Advice and Air, said: “Mainstream mortgage advice is facing a series of challenges which is making it harder for firms to recruit and retain staff and to remain profitable.
“The fall in mortgage adviser numbers last year could accelerate given moves to make it easier to go direct to lenders for mortgages and therefore it is important for mainstream mortgage firms to look at diversification opportunities and for areas of specialism where they can stand out against the competition and protect margins.
“The over 50s sector is one such area and firms need to support staff in acquiring the qualifications, knowledge and skills to serve this rapidly growing customer need.”
He added: “Modern lifetime mortgages have evolved with a wide range of options which allow all, some or none of the interest to be served alongside flexible capital repayments and a variety of embedded protections.
“Later life lending is moving from a niche to a norm and is relevant to a broad cohort of customers ranging from the squeezed asset rich, cash poor to the mass affluent or high net worth who are focused on tax efficient intergenerational wealth transfer.
“The later life lending opportunity for advisers is growing and there is plenty of support available to mainstream mortgage advisers to help them succeed in this sector.”
