Loan applicants in receipt of Centrelink benefits need to be aware that they may risk impacting their entitlements if they fail to receive adequate financial advice, Mariner product manager Daniel Burke said.
“Consumers could potentially be disadvantaged if they were not well informed about the impact that a reverse mortgage may have on their benefits or weekly cash flow,” said Burke.
“There are potential risks to the whole industry if a customer has their Centrelink benefits impacted.”
A minority of providers currently make it mandatory to get financial planning signoff on their products.
According to Kieren Dell, chief executive of SEQUAL, the representative body of reverse equity providers, financial planners are still only a small part of the distribution market for the reverse mortgage products but it is expected to grow as more product providers insist on advice and as more dealer groups place the products on their approved product lists.
Research suggests that the average loan size is now around $50,000, according to Dell.
