The Intermediary – July 2026 - Flipbook - Page 64
L AT E R L I F E L E N D I N G
Opinion
Referral growth
puts the focus on
best practice
T
he obligation under
Consumer Duty to
deliver good outcomes
for customers has set
the course for how
mainstream mortgage
advisers, wealth managers and
independent financial advisers (IFAs)
should approach the later life market.
Best practice is to deliver holistic
propositions which consider all
options for clients regardless of
whether they fall into the firm’s core
area of expertise. Now the Financial
Conduct Authority’s (FCA) Later Life
Mortgage Market Study reinforces
how best practice and delivering
good outcomes should include later
life lending options too. Modern
lifetime mortgages, particularly those
offering voluntary or structured
repayments, are an increasingly
relevant option for older homeowners
as part of their financial planning,
supporting retirement planning,
estate planning and intergenerational
financial support.
Given this, advisers really need a
clear strategy for how they are going to
offer access to this growing market.
Lending best practice
Expanding into later life lending is
an opportunity, but it is a specialist
area requiring a focus on robust
compliance frameworks and
continual oversight.
For many firms, building referral
partnerships with specialist firms is
the lower risk and easier to deliver
option that ensures clients have access
to expert advice. Lower risk, however,
is not no risk.
Any firms planning on becoming
introducers need to understand what
best practice in later life lending
referral partnerships looks like and
how the relationship should operate.
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The Intermediary | July 2026
The later life lending market is
nuanced and can be complex. Advisers
need confidence that the referral
partner they select will provide
genuinely independent, whole-ofmarket advice and has deep experience
in this specialist space.
The central factor
The crucial point for any referral
relationship is that the focus is
always on customer understanding
and informed decision making
which must mean all alternative
solutions as well as lifetime mortgages
are discussed.
Offering holistic advice applies to
specialist later life lending advisers
just as much as it does to mainstream
mortgage advisers, wealth managers
and IFAs. Other products such as
Retirement Interest Only (RIOs) and
Term Interest Only (TIOs) mortgages
may be appropriate as well as standard
mortgages.
When selecting a referral partner,
introducers should focus on whether
specialists will offer alternatives and
prioritise customer outcomes just as
much as they focus on transparency
and robust oversight.
The referral relationship must
work for the introducer firm and their
client. The referring firm should be
able to remain as involved as they
wish, with the client relationship
fully preserved.
Putting best into practice
Referral partners need to demonstrate
comprehensive adviser training,
ongoing competency standards as
well as robust quality assurance and
oversight processes.
This should include structured
compliance and file review processes
with each case assessed against
defined standards. Advisers should
DAMON O’CONNELL
is director at Key Partnerships
begin with a clear understanding
of customer needs before moving
to product discussions, with full
explanations of risks, benefits and
affordability considerations.
Introducers need to be sure their
referral partner will check that
customers fully understand the
product and that they give others
such as family the opportunity to
get involved in the decision if that
is appropriate.
Advice offered by referral partners
should feel personal to customers
with suitability at the heart of the
recommendation linking back to
customer needs and circumstances.
For best practice to really be
delivered it has to mean ensuring that
customer needs, adviser rationale and
outcomes are clearly documented.
Recorded conversations provide an
audit trail, enabling firms to assess
how advice was delivered and whether
the customer fully understood before
proceeding. This allows cases to be
consistently reviewed against defined
standards of good practice.
Building a referral relationship
with a trusted partner can ensure
that opportunities to win business are
not missed as well as supporting the
development of new income streams.
It is central to helping firms deliver
good customer outcomes aligned to
Consumer Duty obligations and the
ongoing focus of the FCA on the later
life mortgage market.
But introducer firms need to
understand from the outset, what best
practice looks like, and select specialist
partners that can demonstrably meet
that standard. ●
