The Financial Conduct Authority’s (FCA) targeted support initiative lacks the potential to include later life loans to help homeowners over 55, Key Partnerships says.
Targeted support is an FCA scheme that will go live from April 6. Targeted support will be a new regulated activity, which aims to bridge the gap between individual, regulated advice and generic guidance.
Key Group’s referral arm said targeted support was a “fantastic opportunity” to close the advice gap.
Targeted support will be available for the defined contribution pension sectors and private investment sectors, but not for the mortgage market or defined benefit pension providers.
Key Partnerships said the “once in a generation change” does not include later life lending options, despite many older customers who could benefit from this and may have significant property assets and few savings and investment options.
It urges companies offering targeted support proposals to refer customers to specialist late-life lending advisers.
Key Partnerships said homeowners aged 55 and over own more than £3.7 trillion of mortgage-free property, which the company said should be part of financial planning and advice in later life.
But consumer awareness of the options for lending later in life remains low, meaning it is up to advisors to guide them to the relevant expert advisors.
Key Partnerships director Damon O’Connell said: “To ensure good outcomes for clients, the home needs to be included in retirement planning conversations, but the scope of targeted support does not currently include later life loan options.
“Later life loan products are becoming increasingly relevant for all homeowners over 55 and can support needs such as more efficient management of existing debt, a boost to retirement income, home improvements to potentially make a home more suitable for later life and ultimately perhaps to help finance care at home.”
Last week the FCA presented its first document setting out priorities in the field of mortgage regulation, which aims to be a “one-stop shop” for all market regulator objectives.