Are you talking to clients enough about Wills and LPAs to satisfy the Consumer Duty?

Estate planning is arguably one of the most delicate aspects of a financial adviser’s job.  

Talking to clients about getting older, and eventually their death, involves a huge amount of honesty and trust. It can also mean bringing in clients’ family members to discuss sensitive wishes around legacy and what to do in the case of serious illness.

This can be especially hard in modern families that are often blended, where there is a desire for children from previous relationships to be protected alongside current relationships.

This delicacy also carries a risk that you should be aware of.  This risk is that discussions around Wills and lasting power of attorney (LPA) need to go beyond just asking a client if they have made provision, or suggesting they do, in order to do the best for clients under Consumer Duty rules.

Industry data from Canada Life shows nearly a third (30%) of over-55s do not have Wills and more than three-quarters (77%) do not have an LPA in place.

If anyone without a Will or LPA loses mental capacity, no one, including family, can make financial decisions on their behalf.  

The risk is particularly acute if that product is a lifetime mortgage and if there is a drawdown facility in place which may be relied upon for income or meeting costs such as provision of care in the home.

Clients without LPAs could leave their families facing lengthy and expensive Court of Protection action to have control over their finances, a situation no adviser would want to force a clients’ family into.

At the same time, without a Will an estate is decided by intestacy laws and the client will not be able to decide who benefits from it.  

Having a will also speeds up the process and reduces costs.

Key Estate Planning believes advisers need to focus on Wills and LPAs as part of the  process of dealing with older customers.

Where necessary they should also involve medical professionals to access customers’ mental capacity in order to protect them and the adviser.

Parkinson says: “We see estate planning as an essential part of later life financial planning, one that complements financial advice.

“It helps clients achieve lasting peace of mind and  advisers to meet Consumer Duty obligations while offering holistic support that reduces the risk of future disputes and safeguards family wealth and peace of mind."

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