Number of advisers falls amid rising demand for specialist advice
Recruitment and retention difficulties are increasingly affecting the mortgage advice sector, with advisers being encouraged to develop new skills to address shifts in the market.
This comes as mainstream lenders seek to expand execution-only business following recent policy changes from the Financial Conduct Authority (FCA).
Air, a platform specialising in later life lending, has identified the expanding market for lending to older borrowers as a significant opportunity for intermediaries to demonstrate the value of specialist advice and sustain profitability.
The number of mortgage advisers has declined, with FCA data obtained through a Freedom of Information request indicating an 11% decrease last year to 31,524. This marks the first drop since 2020 and the largest reduction since the period following the 2009 financial crisis.
The decline is attributed to increased regulatory requirements and an ageing adviser workforce. Concerns have also grown following the FCA’s recent policy statement (PS25/11), which is expected to make it easier for consumers to secure mortgages without professional advice.
Air has cautioned that advisers who overlook the later life lending market risk missing business opportunities and failing to meet evolving client needs. The firm suggests that supporting staff to qualify in this area, and providing ongoing training and resources, could help attract new entrants, reduce staff turnover, improve profitability, and enhance outcomes for clients.
Industry figures show that over-50s in the UK collectively hold around £3.7 trillion in property wealth. Many in this demographic require assistance with retirement planning, including flexible debt management. The trend towards mortgages extending beyond traditional retirement ages suggests the market will continue to grow.
Demand for advice on estate planning and gifting is also rising, further highlighting the need for advisers to develop relevant expertise. From April 2027, unused defined contribution pension funds will be included in inheritance tax (IHT) calculations, which is projected to generate an extra £3.44 billion in IHT receipts over the first three years. This change is expected to increase demand for advice on intergenerational wealth transfers.
Recent data shows that parents and grandparents provided £9.6 billion in gifts and loans for house purchases last year, with a total of £38.5 billion given over the past four years, compared to £22.5 billion in the previous four-year period.
Product innovation, particularly in modern lifetime mortgages that permit full or partial interest payments, has added complexity to the sector. However, this also presents advisers with opportunities to differentiate themselves from competitors.
Air maintains that advisers can improve client outcomes and help customers access housing equity, provided they possess the necessary skills and qualifications.
“Mainstream mortgage advice is facing a series of challenges which is making it harder for firms to recruit and retain staff and to remain profitable,” said Will Hale (pictured right), chief executive of Key Advice and Air.
“The fall in mortgage adviser numbers last year could accelerate given moves to make it easier to go direct to lenders for mortgages and therefore, it is important for mainstream mortgage firms to look at diversification opportunities and for areas of specialism where they can standout against the competition and protect margins.
“The over-50s sector is one such area and firms need to support staff in acquiring the qualifications, knowledge and skills to serve this rapidly growing customer need.
“The later life lending opportunity for advisers is growing, and there is plenty of support available to mainstream mortgage advisers to help them succeed in this sector.”
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