The FCA’s targeted support initiative misses out on the potential to include later life lending to help deliver good customer outcomes for over-55 homeowners, Key Partnerships says.
The FCA has opened applications for targeted support permissions with firms able to apply via Connect. It enables banks, pension providers and other authorised financial firms to provide suggestions designed for groups of consumers with common characteristics.
Key says targeted support is a "fantastic opportunity to close the UK’s advice gap" by bridging the space between generic guidance and individualised advice.
But it is concerned that, currently, the “once in a generation change” does not include later life lending options despite many older customers who could benefit and may have substantial property wealth and little in the way of savings and investments.
It is urging firms which offer targeted support propositions to signpost customers to specialist advisers who can assess whether modern lifetime mortgages can form part of their financial planning and ensure good outcomes.
Damon O’Connell, director at Key Partnerships, said: “In order to ensure good outcomes for customers, the home has to be included in retirement planning conversations, but the scope of targeted support does not currently include later life lending options.
“However, firms that offer targeted support propositions should signpost customers to specialist advisers who can assess whether products such as modern lifetime mortgages can be used as part of retirement planning conversations.
“Later life lending products are increasingly relevant to all over-55s homeowners and can support needs such as more efficient management of existing debt, a boost to retirement income, home improvements to potentially make a property more suitable for later life living and eventually to perhaps help finance care provision in the home.”
