Estate planning presents a growth opportunity for IFAs, but the significant majority are failing to capitalise because of the taboo and technicality of the topic, according to new research from Co-op Legal services.
The research identified legal estate planning as a growth opportunity for IFAs. As many as 75% of IFAs believe that providing advice on wills and other legal estate planning would improve client satisfaction. Over half believe it would make it easier to retain customers and more than two thirds said it would increase the number of recommendations they receive via existing clients.
Yet currently, as few as one in 10 British clients are prompted by their financial adviser to make a will, despite almost all IFAs agreeing that clients are ill-informed or have poor understanding about what happens to their wealth when they die.
The research also revealed the scale of the unmet need – and the size of the opportunity. It found that as many as three quarters of people haven’t made a will and only half of married couples or those in a civil partnership have written one. At the same time, the current coronavirus pandemic appears to be driving demand for will writing advice and support, with Co-op reporting that sales have increased by multiples in recent weeks.
However, the research shows that people are confused about where to turn for advice, with almost a quarter having no idea who to go to – and only one in 10 considering their IFA.
The survey identifies two barriers currently preventing IFAs from capitalising on this unmet need and new demand. It found:
- Taboo: Clients are often reluctant to talk about death and advisors feel ill-equipped for those conversations too. In fact, 40% of advisers feel that their clients are hesitant to discuss death and later life planning. Nearly a quarter say with more support around conversations regarding death, they would be better able to help clients.
- Technicality: IFAs and clients alike are looking for help in navigating the complexities and technical nature of later life planning. More than a third of IFAs want support to deliver better services to clients and to build their own legal knowledge and one in ten people think intermediaries should make the process easier to understand.
Caoilionn Hurley, Managing Director of Co-op Legal Services said: “Talking about inheritance isn’t easy. However, done in the right way, with information and insight brought by the right technology tools and technical knowledge, estate planning presents a real opportunity for IFAs to add value for existing clients and drive referrals. IFAs work hard to help clients with financial wellbeing; having legal affairs in order is an underpin to financial wellbeing and intergenerational wealth transfer. This presents great opportunities to deliver new services to IFAs and their clients and Co-op Legal Services has focused on developing technologies specifically in this space.”
To help IFAs to overcome these barriers and capitalise on the growth opportunities, Co-op Legal Services has created a suite of digital solutions.