For example, the research from FNZ and Nokkel found that 93% of UK financial advisers believe property wealth should be incorporated into financial planning, particularly in the context of retirement income planning.
These financial planning insights into adviser attitudes towards property, or housing wealth, come amid a worrying rise in retirees who don’t have enough money saved.
Go deeper with GlobalData
In its 2021 research, What is an acceptable retirement income?, the Pensions Policy Institute reported that five million people were approaching retirement without having an adequate pension.
Since then, the UK’s cost-of-living issue and rising interest rates have made this worse.
Financial advisers are thinking of ways to help their customers further with their financial journeys by raising awareness of the significance of house wealth.
This study comes at a time when the Financial Conduct Authority (FCA) has been compelled to enhance its guidance and eliminate deceptive advertisements after discovering a number of inaccurate or misleading promotions in its investigation of later life mortgage providers.
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By GlobalDataAccording to the study, practically every adviser who was contacted gathers data on housing wealth as part of their fact-finding process.
Although advisers believe that home wealth information is crucial to creating a comprehensive wealth picture, it is rarely (if ever) used to increase wealth.
The advisory sector needs to alter its perspective and include house wealth issues as a significant aspect of customers’ retirement planning.
Findings
For example, the study reveals that just a small number of UK advisers presently incorporate home equity solutions into financial planning services.
31% of advisers do not even explore home equity release, while over half of all advisers refer their end-investor clients to an outside source.
Despite the advantages that greater customer access to advisers’ assets would provide, only 22% of advisers are managing it themselves inside their present systems.
Significance of property wealth
According to the statistics, advisers do not now have the tools necessary to include home equity solutions in their total portfolio.
A third of financial advisors think their wealth management companies could have provided a solution but haven’t, and 17% believe there isn’t an integrated solution available.
FNZ partnership with Nokkel
For its worldwide wealth management platform, FNZ invested in Nokkel in 2022 in order to incorporate their industry-leading property solutions.
By incorporating Nokkel into the FNZ platform, financial institutions in the UK can give clients a more comprehensive view of their entire asset portfolio and give them access to a number of educational tools, giving a wider range of people a deeper understanding of their entire net worth and assisting them in making better financial decisions.
Roland Whyte, founder, and CEO of Nokkel commented: “House wealth needs to become more of a focus for advisers when they plan for clients. Especially in light of the now-live FCA Consumer Duty and the upcoming Retirement Income thematic review, which will only make house wealth more relevant to financial advice.
“But accessibility and data transparency are key to making this a worthwhile end-client experience. Modern technology – that easily integrates with advisers’ platforms – will need to be matched with reliable data. Then automated insights become a possibility. This is particularly important when considering financial solutions that have historically lacked transparency and advice, such as equity release.”
The study looks at how advisers adjust their overall fee schedule to include housing wealth services.
Furthermore, the study indicated that 81% of advisers believe an advice charge is justified on solutions relating to house wealth once an effective and dependable solution is in place.
Alastair Conway, chief executive officer, UKMEA of FNZ, said: “Given the increasing retirement income gap, it’s difficult to see a world without property wealth being considered as part of an overall retirement solution. Our partnership with Nokkel allows us to integrate property related solutions, such as equity release, with an appropriate advice layer which historically has been missing.”
Mark Polson, founder of the lang cat, added: “It makes no sense to not build housing wealth into a client’s financial plan. The industry is still too siloed in this regard, though it is better than it used to be. Historically, the regulator has also had a blind spot for housing wealth, however as the recent retirement income review has shown, this is now changing.
There is an obvious and increasing need for people to draw on housing wealth in retirement, so it is great news the fintech sector is developing solutions to meet this need.”
