Equity release review

Understanding who’s motivating your clients

Alice Watson

head of marketing – insurance, Canada Life

Equity release mortgages stand out from other financial services products in that they have the potential to affect the finances of entire families. As such, obtaining one could be seen as a family decision rather than an individual choice. This obviously adds a layer of complexity or consideration to the advice process, and requires a deeper understanding of your clients. This is so particularly when it comes to understanding their personal long-term goals and the financial aspirations of their children, but it also encompasses any caring requirements they may have for themselves or loved ones.

Canada Life has been researching the psychology behind this long-term thinking, and in particular the impact of the family on decision-making – all with the aim of providing a blueprint for how these early conversations with clients can be better understood.

It’s understandable, for example, that clients may want to seek out another opinion on what’s best for them. We found that clients would rather share their long-term goals with their families than anyone else. Interestingly, only 23 per cent of people said they would share their goal of securing a good retirement with a financial adviser.

Our psychological insights tell us this is most likely down to so-called safety behaviour, as there’s less perceived risk in sharing goals with family than with an adviser. People find it easier to connect with others when they see suggestions packaged We found that clients would rather share their long-term goals with their families than anyone else. Interestingly, only 23% of people said they would share their goal of securing a good retirement with a financial adviser

to suit the way they view risk and their behavioural values.

Some clients might appreciate having the details of a policy highlighted to them carefully, while for others this could lead to a loss of interest, as they just want to know what new opportunities it will give them.

Encouraging clients to share their retirement goals and aspirations with you could provide engaging conversations for all involved. And tailoring these conversations to suit your clients could also benefit them, by helping them form open and honest relationships with you early on, allowing you to support them not just through current circumstances but also through important life events as they unfold.

In fact, this could extend to the wider family, aiding in conversations around the legacy your clients intend to leave and further opportunities for intergenerational planning.

Our research into long-term thinking shows that 46 per cent of people consider financial security their most important legacy to loved ones. And in today’s uncertain climate, passing down wealth could be one of the ways they’re able to achieve this. But in a changing world, it’s becoming difficult to know the best way to approach this matter.

Understanding the behavioural drivers that sit behind family influences and changing mindsets could provide you with helpful ways to encourage your clients to share their long-term goals earlier, strengthening your relationship and leading to more valuable support. M I