Bluestone expands as reverse mortgage demand grows

Bluestone Equity Release is beefing up its executive team to cope with the growing demand for reverse mortgage products from financial planners.

Gerard Bailey has been appointed head of adviser sales, while Max Rosas has been appointed head of strategic alliances. Peter McGuinness, chief executive officer of Bluestone Equity Release, said Bailey will lead a national team to cater to the growing number of financial advisers using reverse mortgage products. Rosas will focus on distributing Bluestone’s products through financial institutions such as credit unions, banks, and building societies. McGuinness said an increasing number of dealer groups were adding reverse mortgages products to their approved lists as more advisers and their clients started asking for them. “Financial advisers and dealer groups are actively developing strategies to use reverse mortgage products,” he said. He said financial planners were more strategic in their approach to reverse mortgages than mortgage brokers were. “Rather than drawing down a lump sum, they draw down installment payments, which can feel like annuities income, but are actually mini-advances on capital.” He said mini-advances were typically paid monthly, and could be made for up to 10 years. For example a client wanting to top up their annual income by $12000 could take monthly advances of $1000 for up to 10 years, and those payments could be indexed to the consumer price index. McGuinness said Australia’s reverse mortgage market was continuing to grow, adding about $650 million in new business in the last calendar year, and expected to add another $800-900 million in the current calendar year. Bluestone has provided over $3 billion of home loans to over 15,000 Australians and New Zealanders. Bluestone is part of the Senior Equity Release Association of Lenders (SEQUAL), a self-regulatory industry body. SEQUAL members are required to have a guarantee of “;no negative equity”;, which means borrowers will not end up owing more than their property is worth.