When it comes to deciding on which equity release scheme to choose, as with shopping for any product online, it would be natural to think that going direct to the lifetime mortgage provider would be the best option available.
We are bombarded by advertisements by companies boasting about how they don’t get involved with price comparison sites. They want us to know that they can give us the best deal out of all their competitors and give you the best service because by dealing with them direct you cut out the middlemen.
But is this actually true?
Getting your equity release direct from Aviva
In recent years, Aviva have been the only equity release lender to still be offering their own direct sales and advice service. Rather than having to deal with searching through independent advisers and comparison websites, you have had the option to simply go straight to their direct sales team.
Without the middleman to hike up the costs, the savings are passed on to you. Right?
Aviva have closed their direct sales service
As of 1st July 2013 Aviva are no longer offering their direct equity release advisory service. While they will still be operating as a lender, it will be necessary to go through an independent advisory group such as Equity Release Supermarket to access Aviva’s deals. But why have Aviva Equity Release closed it’s own sales force which has been running for almost 15 years?
Aviva are making this decision based on one factor: the cost of providing that service. Going direct is not always the best way when it comes to seeking advice about any service, especially equity release. The costs of maintaining their own direct sales team is something that no other lender accepts, and now Aviva has moved to follow the market. And without those extra costs they are able to offer even better rates to their customers by offering their equity release schemes through independent brokers.
The equity release direct model was floored. By paying high basic salaries, providing company cars, mobile phones, pension scheme with death-in-service benefits, this somehow has to be paid for. This cost was passed onto the consumer. By paying a higher equity release interest rate than those offered through brokers, Aviva recouped the cost this way, albeit at the expense of their direct consumers.
How does this benefit you, the consumer?
Aviva have always offered excellent equity release schemes and advice through their own tied advisers, but working through an independent broker means that they can avoid the extra costs of keeping their own tied-in team. Going through an independent company such as Equity Release Supermarket also means that customers are offered a wider range of deals, to find the one that is the best fit for you.
For instance, Aviva Equity Release Direct advisers could only advise on Aviva’s products alone. Being tied, how can this represent best advice when effectively they are shoe-horning customers into their two products. This doesn’t apply to independent equity release brokers who can research from the whole of the marketplace to find the best deal. For instance what if the customer wanted to make partial repayments, or were concerned about the severity of early repayment charges? In both these situations, Aviva would not be the equity release scheme of choice.
How did the Aviva Direct Deal Compare To Equity Release Brokers?
Compared to the Aviva direct deal, independent equity release brokers such as Equity Release Supermarket can offer all of Aviva’s lifetime mortgage products that the tied arm offers, plus they can additionally provide a free valuation & cashback upto £1,000. This was not available previously from the Aviva Direct advisers.
The biggest area where the savings can be made via the independent route is with regards to the interest rates on offer. With a price differential between the direct-independent equity release schemes of sometimes in excess of 0.25%, the potential long term savings by going to an independent equity release adviser can therefore save you £1,000’s.
The equity release market has changed significantly in the last ten years. The market has spoken, and customers have recognised that independent equity release advisers are the way to ensure that you can always get the best deal. To seek advice on the best equity release deals then go to comparison sites such as Equity Release Supermarket Ltd who have an excellent compare deals table where ALL lifetime mortgage, home reversion & retirement mortgage schemes can be seen.
They can be contacted on 0800 678 5159 to discuss the various schemes available.
