Industry must do better at educating seniors

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A recent study conducted by SEQUAL, It’s on the house, showed that although 78% of people over 60 had heard of reverse mortgages, only 40% correctly understood how they worked.

In fact, the study showed 28% of seniors held the incorrect belief that a reverse mortgage involved selling a portion of the home.  This is probably at least partly due to the sustained and significant marketing efforts of Homesafe Solutions for the Bendigo Bank Seniors Equity product.  Known as debt free equity release, this is completely different from a reverse mortgage, and does involve a part sale of the property in return for a cash payment.

Although a lot of progress has been made over the last few years, SEQUAL and the industry at large need to do a better job of educating seniors on exactly how these loans work. SEQUAL is asking the federal government to help, perhaps by way of an information campaign. While this would certainly help, it’s probably unlikely in the current climate of government cost-cutting.

So what to do? Well, for a start SEQUAL must more fully engage brokers and intermediaries as a grass roots education channel to other business sectors such as law and aged care. For instance, the understanding and cooperation coming from the legal sector is very poor in some states.

In addition, community and senior organistations  must be more fully engaged by local representatives so that the correct message is disseminated on a regular basis. Ultimately this is about protecting seniors through education, and the industry can’t rely on government to do this important job.