In 1981, when Ghost Town was number one in the charts, the average UK house price was around £24,000.
The average first time buyer, was 27 or 28, so they would now be in their early 60s. Despite working through what many people call a “golden age”, it’s not all easy for these clients.
Aviva’s latest Real Retirement Report looks at the finances of over 45s, with a particular focus on property wealth. What’s more certain than ever is that these clients need holistic wealth advice in order to achieve their ambitious, and often diverse, goals.
For example, almost one in four (23 per cent) of mortgaged over 45s are worried about paying off their mortgage debt.
At the same time, almost one in three (31 per cent) have already, or plan to, give money to help a child become a first time buyer.
But when these clients are preparing for retirement, how comfortable do they feel talking about these wider assets? How many clients even see their house as an asset that should be included in these conversations?
Pensions and savings should still be a key focus, and property is another part of a ‘blended’ approach to wealth planningIn our last adviser barometer, only 38 per cent of advisers described themselves as general practice, and a further 28 per cent said they were wealth management specialists.
While those of us in the industry can see why specialising is beneficial, in order to navigate complex products and issues, this is not how the majority of clients see the world.
They trust an adviser to help them in all aspects of the finances, and sometimes that means having challenging conversations about different assets and how to leverage them.
Our Real Retirement Report is full of interesting statistics that you can use with clients to help them consider their financial situation more widely.
Based on the research findings from our report, there are some areas that could be worth looking at. These are:
• Discussing property wealth as an asset, not just inheritance planning. It’s the largest asset that the vast majority of clients have and there are plenty of options to consider. If you’re recommending downsizing, lifetime mortgages or buy-to-let, there’s an opportunity to build and strengthen referral opportunities in your professional networks.
• Get down with the kids – open up your meetings to the older children of your clients if they’re happy to do so. If parents want to help them financially, try to involve them in the conversation to make it happen. This is also a good opportunity to help adult children think about saving smarter, turning them into profitable clients for the future.
• Don’t let clients rely on solely property – it’s clear from our research that people think their property could support them forever, but for many this isn’t likely to be the case, particularly if they’re looking to support themselves as well as their family. Pensions and savings should still be a key focus, and property is another part of a ‘blended’ approach to wealth planning.
As an industry, we’ve been operating in uncertain conditions for a few years. And, following the result of the EU referendum, customers are feeling that uncertainty too.
The firms that will succeed will be those who can reassure clients and continue to get the best outcomes for them in every area of financial planning.
Tim Orton is chief executive of Aviva Advised Platform
