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Air Study January 2023: A lack of product education and interest rate changes are the biggest barriers to more customer engagement

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Air Study January 2023: A lack of product education and interest rate changes are the biggest barriers to more customer engagement

Advisers call for more support from providers, including training on areas such as vulnerability, the wider market and soft skills.

January 2023 – A study from Air has revealed that nearly half of advisers (44%) believe that a lack of consumer education on products is a key reason why consumers aren’t engaging with the later life lending market.  Almost two thirds (59%) of brokers surveyed said that rising interest rates are another hurdle to later life lending engagement. 

Following the mini-budget in September 2022 and the Bank of England’s attempts to manage inflation, interest rates have increased in this market with LTV’s shrinking and product choice reducing.  That said, they have now largely levelled out with lenders factoring in potential changes to the base rate and offering more flexible options for customers.  

A further 27% of brokers said that people’s impression of being expected to pay off your mortgage before retiring was a common theme preventing later life market engagement, along with 19% feeling that a lack of access to information was another hindrance.

Provider Support Valued but More Needed in Specific Areas:

With advisers facing an increasingly challenging market, 36% said that the support and advice from lenders helped them to do their jobs more effectively over the last 12-months, while just 12% said that lender support had not helped them.

However, many of those responding to the study demonstrated a hunger for further guidance and training in a variety of areas. One in five (20%) were keen to develop more of an understanding of the broader market, and 14% wanted to build their soft skills while others looking to develop better complaint processes (8%) or gain insight into individual lending criteria (7%).

Stuart Wilson, Chairman of Air Club, comments:

“With advisers fighting to educate consumers while at the same time battling a higher interest rate environment with reduced product choice, there is plenty of scope for providers in this market to step up.  Significant work is going into customer education and highlighting the benefits modern lending products, but we need to carefully consider what else can be done.

“Indeed, while it is good news that over a third of advisers say providers help them do their jobs more effectively – and we know the current economic conditions are not easy for lenders – this figure needs to grow.  2023 is likely to be a challenging year for the market but by working together, we can help customers achieve the type of outcomes that the upcoming Consumer Duty legislation demands.

“Air is committed to working closely with its Ambassadors and growing the Academy to help our members to flourish – even in the current uncertain times.”  

If you’re a member of Air Club, make sure you’re making the most of our membership:

If you’re not a member, sign up today here.

For more information, call our expert adviser support team who are on hand help you with your later life lending questions. Get in touch today on: 0800 294 5097

About the research

Research undertaken on over 220 advisers operating in the later life lending market between October and November 2022.

For further information on the study please contact:

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