Analysis of approximately 5,000 statements of advice (SoAs) from regtech Fourth Line has found not one adviser mentioned home equity release or reverse mortgage strategies for consideration by clients.
The analysis of SOAs were written between 1 July, 2019, to 15 May, 2021, from 15 advice licensees and 1,980 authorised representatives.
Around 50% of the SOAs were for people agreed 55 or older with an average net wealth was $1.53 million allocated across $668,000 in superannuation, $332,000 in private savings, and $677,000 in property (net of secured loans).
Other findings included:
- For those aged 45 over, 73% of all SOAs reviewed contained advice on super and pensions;
- For those over 55, 14% of SOAs contained advice on private savings; and
- For those over 65, only 18% of SOAs included advice on Centrelink Age Pensions (juxtaposed to Retirement Income Review finding that 71% of seniors were receiving the Age Pension).
SOAs by age group
Source: Fourth Line
Comments
We are not 'shunning' them. If you spoke to financial planners you would discover we are banned from recommending them. No credit licence, not on the APL... blah, blah, blah. Can't even recommend the centrelink scheme. It is a farcical situation, like so many things in this broken profession.
Average net worth of $1.53m!! Was it appropriate for any of client situations?
Advisers "shunning" reverse mortgages - ridiculous basis for a headline.
Please do better.
"For those over 65, only 18% of SOAs included advice on Centrelink Age Pensions (juxtaposed to Retirement Income Review finding that 71% of seniors were receiving the Age Pension)." Or, you could have screamed the headline - Most Age Pension recipients cannot afford financial advice!
"Home equity release or reverse mortgage".... same thing. Home equity release is serviced by 3 options; reverse mortgage, home reversion and equity release agreement. RMs are credit products (license needed), home reversion is a real estate product (there is only one - Homesafe), and equity release agreement which is a financial product and there is only one - DomaCom - and you need a license, APL inclusion and the adviser must be product accredited. Equity release is a tool for increasing intergenerational planning and a great way to boost your business.
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