The latest IFA Confidence Index – a quarterly study from the UK's longest established equity release provider Hodge Lifetime – has revealed that IFAs feel equity release is getting a bad rap.
The index shows that despite the fact that 73 per cent of IFAs expect a five per cent increase in interest in equity release release over the next three months, many feel this interest would be much higher if it weren't for the unwarranted negative connotations of the product.
According to Hodge Lifetime, 65 per cent of IFAs say they remain concerned about the negative reputation that is portrayed in the media of equity release, with 88 per cent saying positive coverage would "act as the main catalyst for increasing the growth in the equity release market."
The study, which looks at the concerns, perceptions and issues expressed by IFAs operating within the equity release sector, said that in addition to poor media coverage, misconceptions of the product itself have added to the cynicism surrounding the market.
More than half (52 per cent) of IFAs surveyed said they fear equity release is being confused with sale and lease back schemes, while a fifth say they think people are worried about redemption penalties.
But, despite all these fears, IFAs remain generally positive about the equity release market, with almost all of those surveyed (98 per cent) claiming that their confidence in advising on equity release schemes to potential customers has remained high over the past three months.
The general consensus is that more needs to be done to educate people into the benefits of equity release as well as potential drawbacks, with 62 per cent of IFAs saying pledged support is needed from the Citizens Advice Bureau and leading charities for the elderly.
A firmer stance is needed by the industry to remove the confusion about equity release and sale and leaseback schemes, says 45 per cent of IFAs, while 43 per cent believe the perception that equity release should only be considered as a last resort is unfair.
Jon King, managing director of Hodge Lifetime, says that despite the fact that the survey has predicted a rise in both interest and completed equity release schemes in the coming months, the area would be even more popular if it wasn't for the unnecessarily negative press the sector often receives. "It is clear that both trade and national media have important roles to play to properly inform IFAs and the general public about the benefits of this product area," he said.
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© Fair Investment Company Ltd