Huge Disclaimer: The following transcript was generated by a machine. It’s not perfect. It’s definately best to listen to the audio version!
Alex Curtis 0:03
Hello, and welcome back to the equity release podcast and today we’re talking about equity release calculators and I’ve got a fee on haggis with me today. How you doing? Very well. Thank you. I am very well, I’m very well. So would you be able to just introduce yourself and just tell us a little bit about what you do?
Ffion Haggas 0:22
Yes, of course. So, my name is FFion, as you’ve just said, I started the company bots for brokers, because he used to work for the Halifax in mortgage processing. So I’ve always been a bit of that he and I but I didn’t know it really a lot about finances even though I’m a whole no home owner. I didn’t realise how little people knew about the mortgage process until I went to it for the Halifax and I just fascinating because I thought it’s such an essential thing to know how our income works together, and how everything that we do affects what kind of mortgage we can get. So I left my job. So it’s really interesting. I was thinking about becoming a broker, then unfortunately, my department closed. So I just I’ve always been a bit of a geek. And I was into doing chatbots. And I thought, you know, what, my, my love for technology, and this sort of idea that people could do the sort of an easy way to understand the mortgage process. So it led me to, to develop the bots, which a chatbot is basically an automated messaging service. So it’s a way for people to find out information before they actually speak to an advisor, which is what a lot of people want to do. And also, if you try and understand finances, most often, you’ll go onto a website, you’ll be reading information, and it might say, if you’re this, then this applies to you. And if you’re that, that applies to you, and it can be really confusing. So the idea with the bots is you can you can put your information in and then instead of being if you This if you’re that it can say, Well, you’ve told me you’re there. So this is the information you need to know. So, that’s that’s how I started developing my business. And then in October, I got into working with with a broker who does equity release. Now he was in a in a group with me, and I could see he was advertising and he was getting so much abuse on his Facebook ads, some people, this is a scam. We don’t, you know, our mother, she’s lost thousands of pounds from you know, 1990s and I really wanted to help this guy because I knew he was a nice guy. So I thought, well, hang on. I know that my sort of thought process at the time was actually really nice. I’ve got my dad’s words in my head. You know, don’t touch it with a bargepole. It’s a scam. It’s a con, but I thought this guy’s a nice guy. He wouldn’t be scamming people. So I got talking to him and I had realised after doing some research, what how good the product is. So it’s not for everybody. But it’s certainly not a scam. It’s not to rip people off. It’s not It’s not like going to lose your house. It’s not like the, the home reversion schemes back in the 1980s. So and I think it’s I don’t know, whether it’s because I’m a bit of a say this I had sort of, it’s because it gets a lot of hate, I kind of thought, you know, I want to, I want to kind of help to sort of change this perception. So, so since then I’ve been developing some equity release spots, because it is such a complicated area. I want to help to simplify it and show people what their options are. Because if you’re if your related life borrower equity release isn’t your only option anymore, it’s one option and it’s one option that you may consider, but there are other options as well. So, but as we know financial information is can be quite tricky to understand, especially You know, if you if you’re the layman, so my sort of mission now is to help educate people about equity release and to show them, you know, it could work for them and, and don’t, you know, don’t let them get put off.
Alex Curtis 4:14
Absolutely. And I think one of the reasons why I wanted to do this particular episode was to kind of let the consumers know who were in the market for actually released that. There are some calculators there that are not calculators, we’ll talk about that. And we had one of the brokers on and we had a case study where a calculator couldn’t work that out, I’ll give the solution. I think he had to work outside the box quite a lot. So we want to so we’re kind of on the same page that we think people should be able to help people understand and give a bit of guidance, but I think also at the end of the day, people need to be aware that a calculator is not always going to give you the exact result. You do need to speak to broker as well. But I think one thing you said people don’t want to speak to someone until they’ve got a bit of info first. So it’s kind of that balance of bridging that gap, isn’t it of making sure there’s enough info, it’s not misleading. And we’re not tricking anyone into a phone call that they don’t don’t want.
Ffion Haggas 5:16
Definitely. Well, I think it’s brilliant what you’re doing because it’s people need this honest information. So, you know, people don’t know where to turn. And equities release is so much trusted. You know, why track people at the beginning? It’ll make.
Alex Curtis 5:36
So I think we’ll Yeah, let’s talk through that as well. So, there are so there are, I suppose for consumers they are there are brokers and people that do equity release that will advertise their, you know, their service, but they’re also in front of services, a lot of lead gen companies who sell inquiries and it’s all slightly Different now since GDPR, but it’s all still GDPR compliant, they’ve got all the small printers, they’re not doing anything illegal. However, I don’t like the so our business doesn’t sell leads, it’s not something that we like to do. But essentially, there will be companies that will create a brand that will advertise equity release. And they’ll say, use our equity release calculator, and they’ll ask you to put your name your phone number, property details, and then it’s not a calculator, because it will say, or someone will call you back because it’s an easier way to get an inquiry. It’s cheaper to do it that way. So not everyone does it. But there are a lot of companies out so my advice only consumers is to if there’s something that says calculator, and it’s asking for your phone number in the first step that it did, chances are it’s probably not a calculator. Unless it’s one of the big brands that like a vive or or or whatever I’d say. Have you experienced anything or seen anything similar?
Ffion Haggas 6:58
No, definitely. One of the things is, please enter your postcode, so we can give you your equity release figure. So people think well, if you if you hear that you think, Oh, that makes sense, because it could be it could be to do with property values. But no, they don’t need it. They just need basic to give you a basic calculation, all you really need is your age and the value of the property. quite rightly, like you say, no calculator can never give you a figure on ever on any financial product, because there were a lot of people aren’t aware of is that, yes, your how much you can borrow is based on the value of your property and your age, but it’s also the risk element as well. So how risky the lender thinks you are, how risky they think the property might be, you know, it’s all this all these kind of other factors that the lenders they keep to themselves, they don’t tell you, you know, what they think is risky and that’s the difficulty as well with You know, mainstream financial products as it is, you know, everybody’s got different criteria. And it’s a nightmare. I really do not envy the brokers having to sell stuff. And when I was in Halifax, we used to think that as if they don’t know that the brokers would ring up and ask the question, but actually, when you come out of there in your world of the Halifax criteria, you realise that actually, there’s hundreds of lenders that these brokers have to know the criteria for so it’s, you know, no calculator, like I say, because because of this criteria because of you as an individual, because that’s so important to the lender. No calculator can give you that information. However, you can start with some kind of a guide because that’s what people want to know. It’s like myself, you know, I was kind of thinking about remortgaging I should remortgage I’ve been on the same deal for the last 10 years I thought was a really good deal. And like say I’ve worked in finances, and I didn’t think I did. No, I could use my equity as a deposit until I went to work for the Halifax so it’s, it’s lots of different things that you, you said on another episode you don’t know what you don’t know. And it’s so true with with finances, but having a bit of an understanding. So you know, I might not be able to borrow 200,000 pounds for another mortgage, but a calculator might give me that figure. So then it’s an idea, I’ve got a ballpark figure, then I know that I can’t borrow 500,000 I know I can get more than 100,000. So it’s just to give people an idea, really. The calculators, no calculator can give you an exact figure. But most people starting out, they just want to do a bit of research. They want a bit of a figure where they can start and then continue that research on. They don’t put their information in and then you know and it’s it’s a waste of time. I know myself I put in my details and I do it because I want to see how their calculators work. So I’ve got an idea what kind of questions are asked Because, for me, I want to keep it, you know, as minimal as possible age, how property value, I don’t want to know, you know everything about them. So I like to see what other people are doing. And then I get all these phone calls of people to sell me equity release. And there was one I got this. The other day, actually, I got an email, and it was rates of change, check out the calculator. So went on the calculator, and then the phone started ringing. Now, it was an 800 number. So generally I wouldn’t answer that but because I was coming to do the podcast, I thought I’ll do this bit of research. And it was somebody travellers Home Equity release. You know, I just woke her. I was in bed, I wasn’t for a conversation, you know. So I was polite as I always am. But it’s just, it’s frustrating because I’m not there at the minute I’m not. But it’s gonna be a few years before I’m there for equity release. But if I was actually doing it, for real You know, you’re at that stage around doing a bit of research, you don’t, you don’t necessarily want to speak to somebody, you don’t want to have to give over all your details just to find a figure. So, you know, if you are, if you are, if you’re using a calculator, really good one is the step change calculator. So that one you can put in the value of your property, your age, and how much is outstanding, and that’ll give you a figure, no details at all.
Alex Curtis 11:26
I was going to say what other kind of bits, I suppose warning signs for consumers? I think I can only think of if it’s asking for you for your phone number early on. Probably it’s probably going to be a lead gen site, and that’s going to be best to avoid that. I think the problem is there are 13,000 searches in the UK a month around equity release calculators. There’s a huge demand for people wanting to use an equity release calculator. That’s that’s a lot The pressure from an equity release is a really competitive market in marketing advertising, that the cost to advertise in activities on Google is very, very expensive. So your there’ll be a marketing manager or a marketing person at a company that’s spending a lot of money to advertise. And they’re getting pressure to get more to reduce the cost per lead the cost per inquiry. So they’re doing all these kind of shortcuts to get the cheaper costs in. And then what’s happening is the law of averages is the more people that speak on the phone, the more deals that go through, because you know, it is a good product, and they are they are good advisors out there that it’s just this rat race of trying to get as many people’s phone numbers as possible. And that’s a bit of a problem. Because it’s just like you say his activities already got a bad rep. And then if we’re like, making people feel even worse about it with these fake calculators, it’s kind of
Ffion Haggas 13:00
I suppose it just compounds the problem, it’s a it’s a problem for the consumer for equity release advisors, mortgage advisors, it could be really good opportunity, because the big companies that are doing this and the lead gen companies, they, it’s just cold, it’s just we want your sale. And I think that is quite obvious from the start. And it’s, you know, it’s like this bait and switch tactic that they’re doing. Whereas the sort of the kind of brokers, the advisors that that I work with, they’re, they do it because they’re passionate because they love the consumer. So I think that for for these guys, the more transparent the more honest they are, the more information they’re giving people up friends without saying, Give me your contact details or give you an answer. What they’re saying is, we want to make our information so good that you’re going to come to us you’re not going to even think about Anybody else and then they see the other companies, the shady ones more for what they are because they see the sort of the, the good advisors and to be honest with you, the majority of advisors, I mean, they, they are good advisors, you know, they really, really care about what they’re doing about helping people. It’s a it’s a vocation, it’s, it’s, it’s a life for people, it’s not a job, you know, it’s not like working in the bank or working anywhere else. It’s helping people get get their get their ideal homes, get their dream homes or get any home. You know, and it’s really to, you know, the brokers I know that get so much job satisfaction, they love doing it, and they’re not out to trick people into rip people off. So I think if they can take that passion that’s that they’ve got anyway and give this information to people tell people what they know, without jumping through hoops to get that information. I think it’s a really good opportunity.
Alex Curtis 14:55
Absolutely, I think that’s the way forward the problem the problem is with these bigger companies They’ll see their cost per click, or there’ll be luck, there’ll be a delay of leads coming in. Because you’ve got to spend a bit it’s a no one, you know, you’ve spent a bit of time warming, you know, getting that message across educating people letting people think about it, that I can’t see the big companies doing it, which would be a massive shame but I think the advantage then is for these smaller equity release advisors, maybe they’re self employed work themselves. You know, I wrote the book on isn’t out yet, but on the how mortgage brokers can stand out and the principles are. Another Same for activities is that when people buy from people, everyone loves a specialist. If you give information without expectation, you’ll build rapport. So that’s giving info without a sales pitch on the end. And failure breeds success and the more they are helping people on whether it’s on video or a podcast like this, letting people get to know them a bit. It’s your sort of people can get to know them before picking up the phone, they’ll be less scared to pick up the phone and then maybe they won’t need the calculator because I’d be quite comfortable just ringing Joe Bloggs or broker because I’ve already got to know him a little bit. Yes, that kind of
Ffion Haggas 16:11
Yes, definitely. This is the thing is it’s a challenge with financial services for smaller brokers, they haven’t got the big pockets, but they’ve got something that the big companies can’t compete with. They’ve got the fact that you can ring them and they’re going to be at the end of the phone, you’re not gonna have to go through the call centre. And it’s it’s not you know, I’ve spoke to this person and then it’s you speaking to some gal she q in, you’ve got that local advisor, you can pop into their office if you need to, you know, so I think it can be really it’s a really great opportunity for the smaller brokers to you know, in these times, you know, social media, everything is the is the great leveller. You know, I know, you know, it’s maybe you can’t compete on budget, but you can compete with your passion and with your heart and I thought When everyday in my, in my books?
Alex Curtis 17:03
Absolutely, absolutely. I so I do hope some of these bigger companies do that as well or, or at least start investing. Like don’t switch their budget overnight if they’re, if what they’re doing is kind of working for them. do that but also spend some time on that education piece as well, like keep, like they can do it. You know, if they’ve got a marketing team, they can be creating content, as well. And they can be using some of their advisors to do the same. You know, they’ve got advisors just as like the self employed people. It’s just like encouraging people to get to know their advisors as well like doing it on scale. So I hope we start to see
Ffion Haggas 17:41
that because generally equity releases shoulders, you can have a holiday, you know, you you can do this and it’s selling the dream to people. And that can be quite dangerous because you get, you know, you get an idea in your head and once you’ve got that idea, the simple stuff you you want that and there’s nothing like money to get that dopamine going in your head, and you don’t listen to reason. I know myself, I’ve sat on Amazon ordering things, and I know I shouldn’t. But I do it before the logical brain kicks in and says, Don’t do it. And, you know, with financial services, there’s a big responsibility. He said something earlier, you know, things, it’s, you know, they’re doing, what they’re doing isn’t illegal. But it’s kind of irresponsible to be selling the stream and look at look, all this money you can release from your house for free. Wow. And you know, it’s it’s kind of no one that people are mistrustful of that because you don’t get anything for free. You know, it’s it can be can be good for the right you know, the right people, but it’s not going to work for everybody and it shouldn’t be sold. It shouldn’t be so so by getting people excited about this sort of dream lifestyle. They could have a but maybe I’m being a bit naive there really, because that’s marketing at the end of the day, isn’t it? But I think
Alex Curtis 18:59
Yeah, It’s tough I, I understand it. I do understand the pressure that marketing because I have worked as a consultant in a call centre type environment with a very, very big advertising budget with pressure every day to get those people busy on the phones. I understand why people take those shortcuts whether I agree with it or not. No, I do. I think there’s a much better way of doing it. If you take, if you don’t just always look at the short term, look at the medium and the long term as well. And you get yourself to a position where you don’t need to do anything. I’m trying to think of the right word, but not kind of misleads, probably the wrong word. But you don’t have to do like little shortcuts, like you said, When like getting people to come back to look at new rates, and then you can tell with tracking that they have and then ring them, that people will be coming to you. So you’re like you’re you’re attracting people rather than trying to push for that business so hard. That you’re you’re trying everything you people can. Like we’ve we’ve seen how many people are searching for activities just on the calculator set, you know 13 13,000 searches a month in total just on calculate if you look at equity releasing in general it’s it’s huge there are people out there looking. And if we if we mark it in the right way I think we can get. I’m just refreshing now just of what so yeah, yeah, was it hundred and 50,000 searches in the UK around equity release.
Ffion Haggas 20:30
So that’s every single month hundred and 50,000 people that need good information and let’s say we’re in the call centre environment. The good thing is with the brokers, the equity release advisors, they haven’t got that pressure so they can be more transparent, I believe, you know, it’s not something I would do. And you know it this is a vulnerable age group. However, you know, I know that younger people. This I think is a difficult thing with the equity release as well because if you go on the equity release comm Council. You got the the FCA ombudsman, you see the complaints about equity release, the majority of them are my parents took this out. And they didn’t know what they were doing. Now, just because they’re older doesn’t necessarily mean they don’t know what they’re doing. You know, so it’s getting this balance as well, because it’s very, you know, they might have just have, you know, they might just not want to tell them to tell their children they were doing it because they thought it’s my money. I’m doing what I want with it. But this, but this doesn’t help the industry because then it’s, you know, people complain in my, my parent was vulnerable. Well, that’s a difficult one. So because you have got because you’ve got to be sensitive to this. I think the more transparent you can be the the better it is for Well, the better you can sleep at night, and the better it is for consumers. There was one thing I wanted to say about the sort of calculators and this was something that I saw the other day so it it didn’t ask cue to put in your details it did give you a finger birth, when you put your finger in, it was preset to inflation. So house prices rising by three and a half percent. So when you put the finger in, it was like you can release 64,000 equity. And then 60,000 is what you’ll have after 15 years. So you think for four grand, that’s cheap, that’s really good for equity release. But when I put the inflation to zero, you were left with nothing. So it’s, again, it’s getting this into people’s hands. I can have that,
Ffion Haggas 22:39
you know, and then they might be sort of looking at
Ffion Haggas 22:42
it. I think it’s the first idea that about people getting to the head can can stack and I don’t think it’s right that the first thing should be on inflation because it is interest rates is house prices. It’s a lot of uncertainty with equity release. I think, in my opinion, you need to start with zero house price inflation. And then say that this is what could happen. So I think you need to start with worst case rather than what might happen next.
Alex Curtis 23:08
Well, yeah, exactly all create some tramlines of worst best average, if there is an average, but you’re, you’re shooting yourself in the foot there because the expectations if that when you speak to the client, the expectation is going to be the wrong way around. So it’s gonna be hard to actually complete that deal because in their mind, they think are amazing. And then when you actually go back to them with reality, it’s not gonna be as good. So from a sales perspective, you’re shooting yourself in the foot by not making people aware of the worst case scenario. Absolutely. Awesome field bots for brokers. Thank you so much. Now that has gone in like two seconds. Obama is a rapid fellow. We’ve barely scratched the surface, but thank you so much. What we’ll do is we’ll have a link to your website in the show notes for if there’s any brokers that want to get a transparent, kind of calculated done, that is not going to be be taking people’s details without giving them a you know, we just want people to inquire when they’ve actually when they want to rather than trick them into. So, you know, pleased that you’re helping people do that. And thanks very much for your time.
Ffion Haggas 24:12
No problems. Thank you for asking me to be on. I’ve really enjoyed it.
Alex Curtis 24:16
Excellent. Speak to you soon. Bye bye bye