Something caught my eye

"To include equity release in every retirement planning conversation regardless of the customer's age"

I started to consider why this might not already be the norm. I can appreciate that it's a potentially emotive issue, but are there really still advisers who baulk when they consider talking about Equity Release?

Perhaps they experience that slightly sinking feeling in their stomach as they ponder how their client will react? Perhaps is the reaction of other family members, or maybe there's the fear that the client's best friend had one of the notorious ‘shared appreciation' mortgages?

Sadly it appears such prejudice may actually be preventing some advisers from having perfectly sensible, and, to my mind, entirely relevant conversations with their clients. In fact for any number of reasons there are advisers who still don't want to broach a subject that might be unpalatable to the person they are talking to - which, when you think about it, is very odd bearing in mind any decent IFA will presumably need to talk about other possibly ‘unpalatable' subjects like death and incapacity - and probably wouldn't pause for one second before doing so.

Perhaps there are other issues at stake. I've heard it said that some advisers don't see Equity Release as being relevant to their high net worth client base. Well, in response to that, I'd counter by saying that here at LV= we've already released equity on 16 properties were worth over a £1m this year.

And they don't just have to take my word for it. In a recent quarterly report, Key Retirement Solutions, the largest specialist equity release intermediary confirmed that the percentage of people releasing equity to help family members had increased from 19% to 35% in just one quarter. Not all of those will easily fit under the ‘high net worth' heading, but whether it is school fees or facilitating property purchase the bank of mum and dad is definitely in business.

We are also receiving regular requests for sizeable releases to renovate property in prime locations. This could be listed property or, at the very least, highly desirable - but involving an outlay beyond the occupant's retirement means in order to bring it up to scratch.

Not including at least a reference to a client's property when talking about retirement planning is like not going to see the leaning tower when you're in Pisa.

Once those questions have been answered, how different and better informed might adviser recommendations be - armed with such crucial financial information.

So, how then best to then bring up equity release?

Well, why not try simply reframing the question. Instead of talking about equity release, perhaps the adviser could introduce a conversation about housing equity and the role this can play in retirement plans. How does their client feel about the property? Are they completely besotted with the place and not going to leave until they are carried out in a box? Or do they see it as a financial millstone and are looking to move out at the earliest opportunity. What does that mean to their financial position? Have they thought through their options - staying put, downsizing, selling off a parcel of land, renting a room, re-mortgaging, selling part of the property whilst retaining the right to stay in it?

So many open questions and no reference whatsoever to equity release. The answers will obviously guide future conversation, but if it's not too much of a stretch to then considering if they are warm to the idea of using some or all of their equity to advance their retirement plans.

Following that the next discussion, of course, is when is the right time? Should they release equity immediately to help a family member or hold off until such a time as they need to fund domiciliary care...?

My question to you, therefore is - ‘as an adviser, do you include equity release in every retirement planning conversation?'

This is something I would love to explore further so any thoughts or comments gratefully received...