Low continued: “It will be financial advisers which lead this revolution. We’re giving them the equipment and the tools. It’s a crystal clear change for advisers. They need to be able to justify why they haven’t done this.”
Jane Hanlon, a mortgage club manager at Advise Wise, agreed. “Compliance law will hone in on advisers if they ignore this option. Rates are important. Whilst cheap isn’t always best, it’s always very important.”
She added: “There is a knock-on impact of compound interest. I’ve seen complaints of this very nature come across my desk.”
Hanlon told FTAdviser that Just’s product change “is very significant”.
“It’s lending based from a completely different perspective. Yes, flexible policies come with more work for advisers. But we know as an industry one size doesn’t fit all anymore.”
Hanlon added Just was “more advanced technologically” and “more automated” than other lenders currently offering this integration, which still require onerous paperwork.
One barrier for advisers to recommend these products is if they have joint clients. Hanlon said because the uplift for a reduced rate only applies to the youngest in a couple - who likely doesn’t have the medical condition - it can be hard for clients in this scenario to benefit from it at all.
Currently, the Equity Release Council holds up a 24-point checklist for advisers which includes a point on taking a clients’ health into consideration, specifically their “health and life expectancy”.
ruby.hinchliffe@ft.com
