A new study from equity release referral firm Key Partnerships reveals that seven out of 10 solicitors fear their property finance knowledge is out of date, and one in two are concerned advising on property finance goes beyond their core expertise.
Key Partnerships says that lawyers are becoming increasingly concerned that rising demand for property finance advice is exposing them to business risks.
The study found 71 per cent of lawyers worry their knowledge of expanding property finance options is out of date and nearly half (49 per cent) fear the advice they are being asked for goes beyond their core expertise.
Lawyers are coming under increasing pressure for advice on property finance, the research found. More than half (51 per cent) say inquiries about using property wealth to boost retirement income has grown in the past year while 47 per cent say they’ve had more inquiries about equity release to clear mortgages.
The advice inquiries are becoming increasingly complex – 22 per cent say demand for advice on using property wealth to fund divorce or separation has increased and 30 per cent say demand for advice on funding second homes has grown in the past year.
However, two out of five (39 per cent) admit they do not work with independent financial advice firms on mutual clients despite the growing demand for property finance support.
Concerns about property finance advice is turning the spotlight on equity release plans as a solution with 68 per cent of solicitors agreeing they would recommend it as a solution if they had stronger relationships with specialists. Around 45 per cent recognise equity release would be a suitable funding solution for purchasing new properties and 56 per cent believe equity release can help with gifting.
Jason Ruse, Head of Key Partnerships, says: “Law firms are a trusted source of advice and often the first port of call for clients who need help with their finances.
“But it is clear they are coming under pressure to provide advice on areas that are not necessarily their core expertise and that is creating issues.The record pace of growth in demand for equity release market demonstrates the need for specialist advice on accessing property wealth.”
The pace of expansion across the equity release hit new records last year with more than GBP3 billion of lending and growth in plan sales of more than 40 per cent.
Key Partnerships is a B2B referral service providing a whole of market equity release solution for introducers and their clients, through parent company Key Retirement; leading specialist provider of financial solutions to the over 55’s. Over 7,000 introducers encompassing IFAs, mortgage brokers, accountants, solicitors and estate agents are registered to refer business to Key Partnerships. In return for a referral, intermediaries earned on average GBP1,341 in 2017 on completion of their client’s loan.