Advice firms could add as much as £760,000 to their value by building later life lending capability from just 25 cases a year, according to new analysis from Air.
The later life lending platform said its latest report found firms establishing an in-house later life lending proposition stand to generate the greatest long-term commercial benefit, although referral to a specialist adviser may offer a lower-cost entry point.
Air said the analysis showed set-up costs for firms referring cases to a specialist later life lending adviser were typically about £4,500, compared with £21,740 for an in-house service.
The report, The home belongs in the plan – Why later life lending is essential for client centred advice, was co-authored by Tony Wickenden of Technical Connection and Phillip Wickenden of Ad Lucem. It sets out the case for advice firms to build later life lending capability as demand from older borrowers grows, while also examining whether firms are better served by referral or by bringing advice in-house.
According to the report, referral models can break even after around three to six cases, while an in-house proposition would typically require eight completions to reach break-even.
Air argues that later life lending should no longer be treated as a niche area of advice, but as part of a broader planning conversation. It also says firms do not need to create a separate division in order to enter the market, provided they are prepared to invest time and modest capital in qualifications, processes and governance.
The report says the in-house route offers the strongest long-term value because firms retain advice fees and full commission. However, it suggests referral can be the more practical starting point, allowing firms to gather management information and client experience before deciding whether to expand their own capability.
Will Hale, chief executive of Key Equity Release and Air, said: “Later life lending has moved from a niche consideration to a mainstream planning conversation, and the commercial case for building the capability has never been clearer. But the firms that will see those returns are the ones that start from the right place: genuine client need, transparent explanation of costs and trade-offs, and robust documented understanding before any decision is made.
“When that foundation is in place, advisers aren’t just unlocking a revenue line, they’re deepening relationships across generations in a way that compounds in firm value over time.
“At Air, our goal is to equip advisers with the insight and tools they need to establish productive referral relationships where appropriate and to deliver confident, client centred advice in a fast-moving environment.”
Damon O’Connell, director at Key Partnerships, added: “The preferred starting point for many advisers wishing to enhance customer lending choice in line with their Consumer Duty obligations is to establish a strong referral relationship with a later life lending specialist.
“For some advice firms who see a clear market opportunity and strategic rationale to broaden their lending proposition beyond its core business, then developing an in-house proposition can be the right route – but it should be approached with careful consideration.
“At Key Partnerships, we work with many advisers that choose a hybrid approach: writing some business in-house while continuing to refer specific cases. This is often for lower-value, more complex, or time-intensive cases that can place a strain on internal resources and distract from the core business lines that drive the majority of a firm’s revenue.”
Tony Wickenden, founder and managing director of Technical Connection, said: “The commercial opportunity here is real, but it only works if the client outcomes are right first. The firms that will benefit most are those that build a repeatable, disciplined process – clear alternatives, plain-English cost explanation, documented understanding – because that’s what protects the client, protects the adviser, and makes the revenue sustainable.”
Alongside the report, Air is running a series of webinars aimed at IFAs, residential mortgage advisers, wealth advisers and later life lending specialists.
