Advice firms will have the chance to welcome younger clients through their doors due to the new Lifetime ISa, Standard Life’s head of financial planning propositions has said, opening up new revenue streams.
Alastair Black told FTAdviser the new Isa - which allows savers to withdraw money early to buy a house without losing attractive benefits - could lead parents to bring their children’s financial needs to their adviser.
“As part of the advice we could see them saying ‘my children are trying to get on the housing ladder, they are thinking about this Lifetime Isa - what do you think?” he said.
Some clients may also discuss paying into their children’s Lifetime Isa, he said. “There’s a whole range of challenges for people in their twenties with regard to money, we could see clients speaking to advisers about this.
“On top of that we could see clients using the same opportunity to use advisers to educate children,” he said, adding that this will help more people see the value of advice, helping to bring younger generations into the equation.
Mr Black said with the advent of the pension freedoms, and the rules around inheritability changing, advisers have become keen to encourage the next generation and develop this relationship.
“The Lifetime Isa gives advisers a fantastic opportunity, because as part of conversations with those in their fifties and sixties, the transfer of money whilst they are still alive is possible.
“As part of the wealth transfer advice, clients are talking about bringing their children onto the housing ladder. There’s a bit of a perfect storm here with the three elements working together [adviser, client and child].”
Paul Lindfield, director at Manchester-based Sedulo Wealth Management, said that the Lifetime Isa does not present a great opportunity for the short term for advisers, but over the long term it does.
“The Lifetime Isa benefits the providers and platforms more in the short term, because more people are wanting to commit, as they’ll get money in the short term.
“If it is already an existing client it could be beneficial with gaining clients,” he pointed out. “You need to distinguish between the existing client children, where there is an opportunity, and the general public, where funds can walk off.”