Advisers have revealed how they broach the subject of death with their clients in order to entice them to consider succession planning - a topic often avoided by clients.
Research from Octopus Investments, published yesterday (February 10), showed 57 per cent of advisers said their clients tended to put off their succession planning until a later date, while one in three advisers said this was exacerbated by clients avoiding the topic of death.
Octopus had polled 550 advisers in December and also found 55 per cent thought their clients did not want to lose access to their assets while 25 per cent said their clients did not realise they should be looking at estate planning.
Here is how three advisers approach the topic with their clients.
1) Felix Milton, adviser at Philip J Milton Wealth Management and Financial Planning
“It’s naive to pretend it’s not important for a client to think about this.
“If the client doesn’t have a will then that’s usually a good opener, as you can explain where the assets will end up if the worst happens and clients tend to want to control that.
“Some clients think talking about their death is tempting fate. In those cases, you can focus on the tax and savings benefit and that tends to work well as it is something that resonates with them.
“We try to bring it up at the first meeting, as what the client wants from their money and what the money needs to do after they have passed could affect what you do with it now.”
2) Paul Gibson, adviser at Granite Financial Planning
“We build a financial plan and cash flow model for all our clients and this identifies those with estate planning issues.
“It also shows the situation is likely to worsen with no action, so [it] will be a discussion point at meetings."
Mr Gibson said he could model the results to show the effects of the client spending or gifting more, and to show the client the true impact of their own situation.
He added: “Speaking about death can’t be avoided as it is the only certainty in life.
“It does not have to be morbid or depressing though and we encourage clients to use their capital to do the things they want to whilst they are still able to.”
3) Ken Bannister, adviser at Active Wealth Independent Financial Advisers
“To get clients thinking about their estate and drive the need to take action, we’ll literally do an inheritance tax calculation in front of their eyes.
“And when they see that figure based on the information they’ve just given you, they’re quite astounded that you don’t need a huge amount of wealth to pay a large amount of inheritance tax.
“Talking to clients about inheritance tax planning leads to conversations about their entire estate and has sometimes resulted in us advising on assets we hadn’t previously.