- Seven out of 10 solicitors fear their property finance knowledge is out of date
- One in two are concerned advising on property finance goes beyond their core expertise
- Two out of five do not have partnerships with financial advice firms
Lawyers are becoming increasingly concerned that rising demand for property finance advice is exposing them to business risks, new research* from leading equity release referral service Key Partnerships shows.
The study found 71% of lawyers worry their knowledge of expanding property finance options is out of date and nearly half (49%) fear the advice they are being asked for goes beyond their core expertise.
Lawyers are coming under increasing pressure for advice on property finance, the research found. More than half (51%) say inquiries about using property wealth to boost retirement income has grown in the past year while 47% say they’ve had more inquiries about equity release to clear mortgages.
The advice inquiries are becoming increasingly complex – 22% say demand for advice on using property wealth to fund divorce or separation has increased and 30% say demand for advice on funding second homes has grown in the past year.
However, two out of five (39%) admit they do not work with independent financial advice firms on mutual clients despite the growing demand for property finance support.
Concerns about property finance advice is turning the spotlight on equity release plans as a solution with 68% of solicitors agreeing they would recommend it as a solution if they had stronger relationships with specialists. Around 45% recognise equity release would be a suitable funding solution for purchasing new properties and 56% believe equity release can help with gifting.
Jason Ruse, Head of Key Partnerships, said: “Law firms are a trusted source of advice and often the first port of call for clients who need help with their finances.
“But it is clear they are coming under pressure to provide advice on areas that are not necessarily their core expertise and that is creating issues.
“The record pace of growth in demand for equity release market demonstrates the need for specialist advice on accessing property wealth.”
The pace of expansion across the equity release hit new records last year with more than £3 billion of lending and growth in plan sales of more than 40%.
Key Partnerships is a B2B referral service providing a whole of market equity release solution for introducers and their clients, through parent company Key Retirement; leading specialist provider of financial solutions to the over 55’s. Over 7,000 introducers encompassing IFAs, mortgage brokers, accountants, solicitors and estate agents are registered to refer business to Key Partnerships. In return for a referral, intermediaries earned on average £1,341 in 2017 on completion of their client’s loan.