Kieren Dell
Reverse mortgage industry body, SEQUAL, has hit back at claims that seniors are at risk from commission-hungry financial planners, calling the comments unwarranted.
Earlier this month Members Equity issued a statement warning seniors against being sold into reverse mortgages by financial planners. SEQUAL (Senior Australian Equity Release Association of Lenders) has labelled the comments as an “unfounded attack”.
SEQUAL executive director, Kieren Dell, said the comments portray financial planners in an unfair light.
“Reverse mortgages are an increasingly important financial planning tool to fund the needs of retirees; to criticise financial planners belies the care that financial planners use in recommending a reverse mortgage to an ageing client, and the research dealer groups have undertaken in approving reverse mortgage products,” Dell said.
According to a Trowbridge Deloitte study into the reverse mortgage market, the average loan size of a reverse mortgage is $53,300. Dell said such a figure means commissions are relatively small and unlikely to drive sales of reverse mortgages.
“Financial planners have also been vocal in the process of improving the reverse mortgage products available,” he said.
“They were a factor in the push to introduce an income stream option, which helps seniors accrue interest at a slower rate.”
In a move to further combat consumer concern regarding the industry, SEQUAL developed a set of industry standards for education last year.
Dell said two providers have already launched courses in equity release, with the courses designed to give planners, and other financial services professionals, an understanding of the reverse mortgage market and how to manage the risks for their clients.
