Does your practice provide advice to clients on matters peripheral but clearly linked to financial planning? For example, such matters as will writing, Lasting Powers of Attorney, tax planning, trust planning, etc.
Or do you concentrate purely on the financial planning itself, referring your clients to other advisers when it is clear they need advice of this kind?
There is, of course, nothing wrong with deciding to focus on the area of your expertise, and referring to experts in other fields. This is certainly not the same as deciding, for example, that you only want to give pension advice. At least if you are focussing entirely on the full range of personal financial advice and referring your clients to tax accountants, solicitors, etc for peripheral matters, you can still call yourself “independent” rather than having to say you only offer restricted advice.
What I think is very important, though, is to recognise the necessity for this peripheral advice, even if you are going to refer your client on rather than give it yourself. Although you will probably pick up from the rest of this article that my own opinion is that it is good to have it in-house if at all possible.
Most of us have always told our clients they should have up to date wills. Or, at least, we think we have! But see if the following scenario seems at all familiar:
You meet a new couple, and as part of your initial fact find you ask them for copies of their wills. The clients tell you they have not got around to having their wills done, although they know they really ought to do so. You recommend they meet with their solicitor to get this done, and even give them the contact details for your own solicitor if they do not already have a strong relationship with their own.
A year later, after having dealt with their life assurance and investments, you meet the same couple again for a review. You ask them to provide copies of the wills you assume they got written after your first meeting with them. They look at each other sheepishly, then admit to you that they haven’t got around to it just yet. Both you and they know that the reality is they probably never will.
This is a very common story indeed.
Perhaps we should find a way to be more proactive. I have certainly met advisers who, whilst not providing a will service themselves, insist new clients have their wills done before they will begin to give any advice. The rationale is that if the clients are not prepared to take action on such a vital matter, the adviser does not trust them to take action on his own advice. A bit strong, perhaps, but I imagine as a result there are a lot more people properly protected with properly written wills.
Another answer is to have advisers in your practice who are trained to take wills instructions and then have a good will-writing service (preferably manned by properly trained solicitors) produce those wills for the clients. This makes it a lot easier to insist the wills are done. You can say “I will send my will specialist, Fred Smith, along to take your instructions so we can get this out of the way.” Or perhaps even call him in from the next office! Clients will often really appreciate this, knowing full well they would otherwise never get around to it.
Lasting Powers of Attorney
I had wills done for my wife and myself many years ago. But for a long time I never really considered getting Lasting Powers of Attorney done. Until I looked more carefully at some of the horror stories out there. Then I came to believe having Lasting Powers of Attorney was even more important than having a will!
The reality is, once I have died and my estate is wound up, my wife will get my money whether or not I write a will. I agree, it can take a long time for an estate to be wound up, and also things are very different for an unmarried couple (in a so-called “common-law” marriage, which does not exist at all in law, of course!). So I am certainly not saying a client should not bother writing a will.
But another reality is that if I have an accident and go into a coma, unless I have a Lasting Power of Attorney in place my wife will be unable to touch any of my money until she has been through a long and expensive court process. Being old-fashioned (or maybe just old!) I am the bread winner in our family and have control of the purse strings. Which would put my wife in a very difficult situation indeed in that scenario. The moment I realised this I made sure we both got our Lasting Powers of Attorney done.
Again, this could be dealt with by recommending the clients go to their solicitors. But again, I wonder how many of our clients would actually go through with this?
A great solution might be to learn to do it yourself – or have someone on staff who is happy with paperwork and can organise this for clients.
Keeping Things In House
By keeping will writing and LPAs in-house you will be making it much more likely that the clients will actually go ahead and do something. This, in itself, means you are greatly enhancing your service to those clients.
Once you are properly trained, you will find it is not rocket science. But clients are usually prepared to pay a reasonable fee, so it is a good source of additional income.
Also, you will undoubtedly find more opportunities will arise while you, or a colleague, are taking instructions in these areas. Clients often seem to be more open and reveal a lot more than they may do when discussing financial planning matters.
Great care should be taken, of course, to ensure proper advice is given. There are a lot of “cowboys” in the will writing arena, and it is important to avoid such firms. It may be possible to do this, though, by partnering with a proper firm with STEP qualified solicitors. There are such firms which will train you or members of your staff and even allow you to white label the advice, but with the benefit of qualified solicitors drawing up the documents and making sure you give the right advice.
I feel it is quite dangerous to ignore the issue of these peripheral matters. They are extremely important, and integral to the financial advice you are giving.
If you do ignore them, be aware there are plenty of advisers out there willing and able to show your clients why they should jump ship and take on a more holistic adviser.
You may choose to deal with them in-house, develop a good working relationship with a firm you can trust and which you know deals with them properly, or consistently and firmly tell your clients to visit their own solicitors etc until they bow to the pressure and take action. But one way or another, I suggest you consider making it part of your standard process to ensure these matters are dealt with properly.