Anyone who has experienced losing a loved one will know it is one of the most emotionally challenging periods in your life. Alongside the immediate practical arrangements that follow someone’s passing, the last thing families should have to worry about is making difficult financial decisions that haven’t been discussed previously. Sam Patterson, Head of Proposition at Equilibrium, reveals why bereavement support can’t begin at the point of crisis.
We believe it is our duty as financial planning professionals to not only support clients, but also prepare them for a bereavement. A financial dress rehearsal, in the form of calm, structured conversations, can help clients and their families understand what would happen if circumstances changed.
Research carried out on behalf of the FCA found that just 47% of bereaved clients felt they received the right support from financial firms after a death, showing why these conversations need to happen before families reach a point of crisis. (Source: Vulnerability review by Critical Research, commissioned by the FCA)
The onus is on financial planners to reflect and build a better culture of support for bereaved clients.
The value of support before a crisis
Conversations with financial planners on the financial logistics in the event of a death or crisis are understandably a sensitive topic and perhaps not something clients will bring up of their own accord. But holding a dress rehearsal now can reduce the burden on surviving family by shifting the experience from reactive to reassuring.
When support begins at the point of crisis, clients are more likely to feel overwhelmed, which is not the right state of mind to be in when making important financial decisions. Decisions should feel familiar rather than frightening, roles and responsibilities clear, with support firmly in place.
The idea isn’t to predict what the future holds but to ensure that plans are known and circulated before the death of a loved one.
Topics conversations should include
No two cases are the same, as is often the case in financial planning. This makes it even more important that each client’s individual circumstances are taken into account, particularly when supporting bereaved family members.
Understanding how income can continue if a client’s partner passed is essential for financial security. We as financial planning practitioners should explain the available options, assess any existing plans, and consider whether those plans support the client’s lifestyle and future goals. This might include assessing whether provisions are in place to allow loved ones to access money quickly and smoothly, which might be immediately needed for funeral costs or arranging the sale of a property.
Longer-term thinking might address existing investments and whether they are designed to support surviving family. Each family is different, so it’s important to establish a shared goal and ensure investment decisions reflect this. Reviewing this with clients should be part of ongoing conversations to ensure surviving family members are best placed for long-term financial security.
It’s also good practice to run through administrative responsibilities, for example, where key documents like wills are kept and who would manage them. Keeping these conversations centred on real-life scenarios and avoiding unnecessary jargon can ensure clients don’t move through life with doubts over what would happen in a worst-case scenario.
A human touch at the right time
As planners, we should always try to avoid client relations feeling overly transactional. And this should definitely be a leading thought before engaging in sensitive conversations like this.
A financial dress rehearsal is a chance to bring compassion into financial planning, navigate clients through difficult moments and build trust on a deeper level. Clients should feel supported before they, or their family, are in a vulnerable moment.
It also fits into what should be a wider objective of financial planning. The entire client journey should be front and centre in advisers’ minds in all conversations, including scenarios that may be years or even decades away. Dealing with difficult and emotionally challenging moments before the fact is how advisers can demonstrate their value in building a life-long strategy for their clients.
The FCA’s findings on bereavement support are a wake-up call for our industry. Confusing communication, delays and a lack of clarity on plans add unnecessary stress for family members at a time when it is most unwelcome. Preparing clients and their loved ones years in advance in a structured and simple-to-understand way can demonstrate the value of our profession when life is at its hardest.
