Working with professional peers for estate planning

    Working with professional peers for estate planning

    Estate planning is an obvious area where financial advisers should consider forging links with professional connections such as solicitors and accountants.

    Solicitors and accountants often come across the issue of a potential IHT liability, but do not always have the knowledge they need to provide solutions, and in particular to provide investment based solutions such as BPR.

    In these instances the option to refer to a trusted IFA can add another dimension to the service they offer their clients.

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    Accountants often have long-standing relationships with their clients, meet with them regularly and will understand critical issues such as the client’s attitude to risk, current net worth and tax position.

    A connection with an accountancy firm could yield significant amounts of new business for an adviser, but the relationship has to be set up in the right manner.

    The Institute of Chartered Accountants of England and Wales (ICAEW), and other bodies such as the Association of Chartered Certified Accountants and professional body ICAS, give their members advice on best practice when working with advisers, and a good accountancy firm will want to carry out due diligence on the advisory firm before engaging with them.

    Their code of practice states that any adviser they refer to should be independent, but they can refer to restricted advisers provided that they document the reasons why they are using a restricted adviser in this instance.

    Accountants will want to see evidence of the adviser’s competence, in the form of years of experience and/or relevant qualifications in this area - such as the Society of Trust and Estate Planners (Step) qualification.

    They are also recommended to document the terms of engagement with the adviser and to share this with the client when a referral is made in order to make clear to all parties exactly who is responsible for what, and who is being paid for what.

    Finally, and perhaps most importantly, accountants will want to have confidence the culture and personality of the two firms and the individuals involved is a good fit, and that they can trust the adviser to form a good working relationship with their clients.

    The key piece that accountants should have in place is the designated professional body (DPB) orlicence, issued by ICAEW and the other accountancy membership organisations. This licence means that in addition to making generic comments, when working with a financial adviser they can:

    ● Explain and evaluate the advice (provided they don’t recommend the course of action)

    ● Identify unsuitable advice

    ● Endorse the advice the client receives.

    Rather than being a threat to the adviser, working with a DPB licensed accountancy firm actually means that the client places a higher value on any advice received as the accountant (who as we noted will have an established relationship with the client) is still involved in the process.