1. Matt Smith wpb creative Equity Release Understanding The Senior Market

2. Matt Smith wpb creative The market opportunity  £1.71bn new business by year end 2007  Average loan size £50-60k  Outstanding lending end 2006 circa £6.5bn (0.6% of mortgage market)  Proc fees 1%

3. Matt Smith wpb creative Product developments  Certificate stating cost of assets and estate  A portability provision  Allowing the borrower to choose the solicitor  A no-negative equity guarantee

4. Matt Smith wpb creative 77% improve their home 34% holidays 31% top-up income 26% buy a large item 22% help family or friends 8% health care 4% IHT planning 1% buy property abroad Source: Norwich Union, 2006 70% improve their home 40% holidays 31% repay debts 16% treat family or friends 14% invest for income 14% IHT planning 9% special occasions 1% future care Source: Key Retirement Solutions, 2006 The market opportunity  As the market grows so do expectations as to what ER can achieve

5. Matt Smith wpb creative

6. European wide phenomenon  Consumers aged 55 and over will grow by 60% in the next 15 years, whereas the under-50 age group will remain stable.  Economist magazine in 2002, companies still spend over 95% of their marketing and advertising budgets on the under-50s age groups.  The seniors are a difficult bunch with different needs and desires. Getting the right message across to this new target market is not an easy task.

7. Matt Smith wpb creative Understanding the senior market  60 years plus  But this is too crude, consider –Geographic –Demographic –Psychographic (Lifestyle, Status, Behaviour) –Product e.g. health insurance

8. Matt Smith wpb creative Understanding the senior market  Boomers will begin retirement having earned more and borrowed more than their predecessors  In the US, 60% more are still making mortgage payments than in 1980  27% more have credit card debt than predecessors  Big concerns are typically “long term health care” and “running out of money” (US Today)

9. Matt Smith wpb creative Understanding the senior market  Things that appeal to today's seniors won't to seniors a decade from now. That's not to say they won't need some of the same features –big alpha numeric characters compensate for poor eyesight  People perceive themselves very differently. –if the target audience is 60 - 75 years then the photography will use people about 15 years younger  The disproportionate number of women to men –a huge shift in the dynamic of many financial sales

10. Matt Smith wpb creative Understanding the senior market  Think about how different a 45 to 50 year old is in their interest and activity level than a person that age when we were young  The coming seniors use credit. It’s not only the numbers of people that is huge, but also their willingness to spend –Seniors account for 25% of toy spend in US  Internet-savvy –Seniors also tend to have more available time to make purchase decisions. They are life savvy and for the most part, research well. They will ask questions before making a purchase - sometimes many, many, many questions

11. Matt Smith wpb creative Understanding the senior market  Seniors may consider themselves younger than they are, different to their predecessors  But society reminds them! –Membership discounts –Travel discounts –Social, health and wellness products –State benefits  Psychologically, there are many steps to overcome as behaviour changes to meet society’s expectations and reflect their pasts and preferences

12. Matt Smith wpb creative Understanding the senior market  Information asymmetry occurs when one party to a transaction has more or better information than the other party. (asymmetrical information)  The flow of knowledge is changing. Parents used to inform children, now children often inform parents

13. Matt Smith wpb creative Understanding the senior market  A new concept of the extended senior customer  More than any other market seniors will involve others in their buying decisions  More prevalent as age and importance of decision increase  US studies show that from age 75 joint decision making increases to 80% of the time

14. Matt Smith wpb creative Understanding the senior market  Family members become indispensable  They tour new accommodation, are present in most large decisions  Potential inheritance issues  Health care, long-term care and life expectancy eat into boomer inheritances

15. Matt Smith wpb creative Understanding the senior market  Third parties play their part  Neighbours and friends often know more about seniors and their needs than do their family  Other care-givers influence where family is not available  Professionals

16. Matt Smith wpb creative Recalibrating our approach  They are not a homogenous market –The market has an age range of 40 years or more  They are not like their predecessors  Their perceptions are everything  Leading edge boomers are reaching 60 now  Build long and meaningful relationships for real rewards  Address third parties  Consider strategic relationships with other suppliers

17. Matt Smith wpb creative Better Selling  Establish why the client wants ER  Check clients’ understanding of ER  Keep clear records  Patience  Allow clients to make an informed decision  Use the resources

18. Matt Smith wpb creative A familiar pattern  Current Account Mortgages / Offsets  Difficult product  Press are sceptical  Education campaign  Positive case studies  Tipping Point  Product is established niche

19. Matt Smith wpb creative Thank you