Specialist non-bank lender Bluestone Equity Release has trumped its competitors by forging a new distribution channel for its products.
In a unique partnership, Bluestone has teamed with financial services wholesaler Cuscal to offer reverse mortgages to its 150 retail clients, including most of Australia's credit unions.
Bluestone's "white label" product will be promoted by Cuscal under the Integris Equity Release brand. Five credit unions have already signed up, including Holiday Coast Credit Union.
"This is a whole new breed of distribution channel. It is pioneering. Traditionally Bluestone, and its competitors, relied on mortgage brokers and financial planners. Some of our competitors have individual one-on-one relationships with credit unions, but this is wholesale," Bluestone Equity Release chief executive officer Peter McGuinness said.
This is an important strategy because Bluestone is set up as a manufacturer and servicer of reverse mortgages, not a retail distributor,"
In total, one million of the credit unions' clients are over 55. Therefore Bluestone has potentially found one million new customers, Cuscal chief executive officer John Gilbert said.
In 18 months Gilbert aims to have 60 per cent of Australia's credit unions signed up and offering the Bluestone product under their own branding.
"Bluestone is talking about potentially doubling the volumes of [equity release products] that we write. It's a very material opportunity," McGuinness said.
The new partnership will also create new jobs. A sales adviser will be established in each state to service local credit unions.
Senior Australians Equity Release Association of Lenders executive director Kieren Dell said: "It's clearly a significant win for Bluestone. From SEQUAL's point of view it's a good thing, as it's a member and abides by the rules."
Reverse mortgages have become a $1 billion industry, which is expected to swell to between $7 billion and $15 billion by 2010. Bluestone Equity Release is a subsidiary of Bluestone Group. It is backed and funded by Barclays Bank.
