Advisers must work on their intergenerational client relationships through both modern and traditional means, according to wealth management experts.
Both Tony Wickenden, joint managing director of financial planning hub Technical Connection, and Cynthia Poole, director of relationship management at wealth management platform Raymond James, agreed that removing the 55 per cent ‘death tax’ on pensions opens up significant planning opportunities.
Pensions minister Ros Altmann previously pointed out that pensions were becoming a tool for those in the “lucky generation” of post-war prosperity and generous defined benefit schemes, to pass wealth on to the current younger generations struggling to build up such savings.
Ms Poole told FTAdviser that these ‘successor pensions’ reforms should not be underestimated as a tool to better get to know clients.
“It’s important to involve spouses in any meetings about pensions or wealth, whilst also trying to engage any adult children.”
She shared statistics revealing that 86 per cent of clients holding accounts with Raymond James are aged over 50 and retirement assets already account for 52 per cent of the assets they hold on clients’ behalf, with 34 per cent in self-invested personal pensions.
Government figures for there are currently 18.3m over-55s in the UK, a figure that is expected to hit 20m by 2018, then making up one in three of the population.
Mr Wickenden said that the key to making the most of the pension freedoms was for advisers to really take the time in understanding all the tax implications and then being able to prove it to clients.
“Advisers must gain client trust and permission, then build relationships via targeted newsletters or notes with ‘saw this and thought of you’ points on financial matters specific to them.
“You can have smaller numbers of clients, so long as they are better engaged. There’s so many changes going on at the moment that this is an opportunity to be the person guiding them through.”
He added that not everyone fully understood the implications behind successor pensions, with those that have not reached out to older clients next in line increasing the potential for losing crucial client revenue streams.
Part of the solution, according to Ms Poole, is to build better professional networks, leveraging links with solicitors and property experts to ensure that the financial adviser is a first port of call and “trusted partner” for anything involving money.
Mr Wikenden added that IFAs need not become multi-disciplinary, in fact quite the opposite.
“I’d suggest becoming a specialist planner, be really good at what you do best, which should be guiding people through big financial decisions, not trying to handle the actual investments, the IT or the firm’s marketing.”
This time last year, Vanguard’s head of UK retail sales Neil Cowell commented that advisers need to attract their clients’ heirs rather than focusing on the baby boomer generation. He suggested redefining the client meeting process to incorporate a family update, with adult children or the executor of the estate.
“Taking on difficult conversations about money, in terms of wills and who’s getting what, is important and they also need to ensure that multi-generational work is not ad-hoc, but its more a defined part of that exchange of value offering to clients.”
Ms Poole added that advisers can communicate with both existing and potential clients via social media platforms such as LinkedIn, as well as simply getting out in the community and offering free sessions.
peter.walker@ft.com
