Advisers are failing to make the most of a £500m opportunity in the divorce and separation market, a report has suggested.
The report, published by the Personal Finance Society and Resolution, a national organisation of family lawyers, found there were only 42 financial adviser specialists accredited in family law – one for every 5,000 people who divorce each year.
Called 'Unlock the divorce and separation market', the report warned advisers the traditional model of working is “slowly drying up” as clients increasingly demand propositions based on service, strategic planning and objective guidance subject to a fiduciary standard.
Keith Richards, chief executive of the PFS, said: “In high stress situations, such as divorce or the loss of a partner, emotions can make focusing on the practical aspects of personal finance decisions extremely difficult.
“Having access to trusted financial advice as part of an integral and supportive professional network at such a key stage in life can be invaluable.
“Professional financial planning gives consumers peace of mind that their personal finances are aligned with their future aspirations and goals.”
To highlight the size of the potential opportunity for advisers, the report also pointed out that as well as the large number of people facing divorce each year, there are 90,000 family financial orders made by courts in England and Wales.
To operate in this market advisers need a “broad skill set” and must be able to focus on “process over product”.
It also recommended that advisers work with family lawyers, who want to be able to refer their clients to someone who can deal with their finances.
Nigel Shepherd, national chair of Resolution, said: “We know from talking to financial planners and advisers who are already Resolution members that the world of financial advice is changing.
“What clients want is sound guidance and trusted support. This is especially true in times of change or upheaval, and they do not come much more unsettling than a divorce or separation.
“Advising those going through a divorce or separation is a very specialist area.
“There are real opportunities for those financial advisers that are able to position themselves as experts in the field, and by being part of Resolution they have great access to a large, unsaturated market.”
damian.fantato@ft.com
