Lonsdale embraces reverse mortgages
In anticipation of an approaching “demand explosion” in the equity release market, Lonsdale Financial Group has created a preferred list for reverse mortgages, with Bluestone Equity Release, Macquarie and OFM Investment Group the first appointees.
Lonsdale chief executive Mario Modica said the dealer group had spent three months assessing the need for equity release programs among its network of 170 advisers and researching potential suppliers.
“There’s an opportunity in this space given the markets overseas have grown rather dramatically. There was an underlying demand within our group and that’s now been enhanced significantly. We’ve now seen seminars being held within our group for example, and already business is being written,” he said.
Modica expects the industry to initially expand slowly. “But in time, once people understand that they have an opportunity — to use the words of the sorts of products we have — to release the equity in their homes to support their lifestyles, I think there will be a demand explosion,” he said.
Lonsdale typically sources research from Lonsec, but Modica said the dealer group had conducted its own assessment of reverse mortgages because the research house did not offer this service.
“It was imperative that our reverse mortgage partners be members of the equity release association SEQUAL, ensuring high standards in product design, codes of conduct and disclosure,” he said.
“The innovative features that each of our reverse mortgage partners provide was a key attraction. A standout [feature offered] by two of the three partners is the ‘inheritance protection’ feature, which safeguards up to 20% of the value of the property to pass to the estate or set aside for future health care expenses. Another smart feature is a ‘no negative equity guarantee’, which caps the obligation to repay the loan at the recoverable value of the mortgaged property.”
To be considered for inclusion on the reverse mortgage panel, each supplier was required to provide a written accreditation program to test advisers’ product knowledge.
“Half of our advisers are accredited with at least one of our reverse mortgage partners,” Modica said.
“We anticipate that this will extend to our entire network, with most planners becoming accredited with all three providers to ensure a wider choice of equity release product for their clients.”
Modica said that while there was a growing interest in the products, some members of the public and financial services industry remained sceptical.
“Education of the client as well as the adviser is paramount in this regard,” he said.
He said Lonsdale could not disregard reverse mortgages as a suitable strategy for some clients and that advisers should be in the market to ensure clients were getting strategic advice past retirement.
Recommended for you
BT is to launch a new low-cost “Focus” investment menu for its Panorama platform this October, in partnership with Vanguard, seeking to compete with industry superannuation funds.
Net gains of financial advisers have already doubled since the start of FY25, according to this week’s Padua Wealth Data, with momentum gathering pace far faster than the previous financial year.
National advice firm MiQ Private Wealth has appointed a new chief executive to lead the business through a “transformative era” after penning a partnership deal with AZ NGA earlier this month.
WT Financial’s managing director, Keith Cullen, believes the firm’s Hubco model with Merchant Wealth Partners will be a “repeatable growth model” for the business as it scales its adviser numbers.
