The inclusion of unused DC pensions in estates is driving interest in using property wealth for retirement income and increasing the need for specialist referral partnerships, new adviser research from Key Partnerships, the referral and partnerships business of Key Group, shows.
The inclusion of unused DC pensions in estates is driving interest in using property wealth for retirement income and increasing the need for specialist referral partnerships, new adviser research from Key Partnerships, the referral and partnerships business of Key Group, shows.
Its Adviser Perspectives Survey found nearly six out of 10 (58%) of advisers questioned say the rule change which takes effect in April next year is increasing interest in property wealth as an alternative to pensions and underlining its growing role in financial planning.
Results from the study – which spoke to advisers working across mortgages, protection, wealth management, estate planning and general financial planning – demonstrate how later life lending is increasingly being considered alongside pensions, investments and tax planning strategies.
More than a quarter (27%) of the surveyed advisers say clients are already accessing property wealth through later life lending in response to the changed status of unused DC pensions as they look to deploy property wealth strategically.
The research highlights concerns that adviser demand is accelerating faster than preparedness creating operational pressure but also major commercial opportunities. Nearly two out of three (65%) advisers expect a rise in inquiries about IHT and estate planning in the year ahead, with 27% bracing for a substantial increase. That builds upon growth in the past year with 46% seeing a rise in enquiries.
But around one in seven (15%) questioned say they do not have a plan in place to cope with expected increases in demand for advice on IHT and estate planning. Nearly a third (31%) say they have a referral relationship in place with a later life lending specialist while 8% have a referral relationship with a tax specialist.
Nearly one in eight (12%) are looking for a referral partnership with a later life lending specialist, and nearly two out of five (39%) admit they are not confident advising on later life lending to clients seeking IHT and estate planning.
Damon O’Connell, Director at Key Partnerships, said: “Substantial numbers of clients are having to rethink their IHT and estate planning in response to unused DC pensions becoming part of estates from next April.
The decision fundamentally changes how people use property wealth as part of estate planning and that is reflected in our research with growing interest in later life lending across the board.
Firms are looking to build their capacity to advise on later life lending and realise that a referral relationship can deliver the support they need to enhance their proposition in response to growing interest in IHT and estate planning.
