Advisers warned of too much focus on 'core' clients

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Many advisers wrongly assume their "core" client base - those approaching or at retirement - means they have no need to consider protection, according to Scottish Widows's head of intermediary protection distribution.

Alun Beynon said the Retail Distribution Review and the pension freedom reforms of 2015 had encouraged advisers to focus on securing funds under management - and had changed the customer profile to an older demographic.

But he said a move to intergenerational planning - and considering the needs of a client's children or grandchildren - would be good for business.

Beynon said: "If we think of the core customer, the pre- or post-retirement customer, they will be in their 60s, they will have significant volumes of investable assets and at some point those assets are going to be inherited.

"This idea that each generation is going to be wealthier than the last was carried through the 20th century, but we are staring at the reality that ensuing generations are not going to be wealthier, they are not going to be able to accumulate assets but they are going to inherit assets.

"But with increasing mortality the likelihood is they are not going to inherit those assets until they are 60 or 65. That's what the mortality rates would tell us, and at that point probably their most expensive child-rearing years are behind them and perhaps the period when they are most financially vulnerable.

"Wealth advisers ought to be looking at their customer base and saying what needs will those customers have further down the generations. They should be mining vertically through the generations and consider the financial planning needs of the children and the grandchildren. There will be significant protection opportunity in that space but it takes a broadening of the focus of what intergenerational planning means."

Beynon said focusing too much on the core client base was bad for advisers' business, citing research which found 65 per cent of those inheriting wealth will not use the same financial adviser as the person they inherited the wealth from.

This, he said, meant advisers could have "value leaking out of [their] company at some point in the future".