The rise of the UK s inheritance economy

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1 Business opportunities for Financial Advisers The rise of the UK s inheritance economy Providing new insights into an area of growing importance to the UK economy intergenerational wealth transfers R a c hael M a s kell R e g i o n al S a l es M a n a g er

2 Business opportunities for Financial Advisers Learning objectives Understand the key drivers behind the inheritance economy Analyse both the opportunities and risks this presents Calculate the potential growth this presents to your business Learn how you can take advantage of this opportunity

3 Business opportunities for Financial Advisers If one of your clients parents passed away, would they call you? If one of your clients passed away would their children or spouse call you? Do you know how many of your clients are named as an Executor in another persons Will?

4 Growing interest in IGWT Business opportunities for Financial Advisers

5 Growing interest in IGWT Business opportunities for Financial Advisers

6 Business opportunities for Financial Advisers The wealth boom in the UK Housing as a driver of wealth Avg. house prices rose by 273% between 1996 and 2016 Homeownership rises for >65 s and <35 s Financial wealth Total net financial wealth increased 172% between 1995 & 2015 Avg. annual growth 2009 to 2015 was 7.5% The concentration of money and wealth Total net financial wealth increased 172% between 1995 & 2015 Avg. annual growth 2009 to 2015 was 7.5%

7 Business opportunities for Financial Advisers An ageing population Avg. UK life expectancy: 81 >60 s now outnumber <16 s Care fees issue? Avg. term 21 months Avg. annual cost 31k Care Home 44k Nursing Home

8 Business opportunities for Financial Advisers Inheritance Avg. inheritance in 2017 = 62k Avg. inheritance in 2027 = 92k 5.5 trillion over the next 30 years

9 Business opportunities for financial advisers Clients, financial advisers and wealth The majority of clients are aged over 50 The majority of wealth is held with people aged over 50 The majority of IFA s are aged over 50

10 Business opportunities for financial advisers Wealth transfer and client retention The top reasons beneficiaries choose not to continue to work with an adviser.. Lack of an existing relationship Desire for greater control Want more convenience

11 Business opportunities for financial advisers Financial services and probate Increasingly Financial Services are offering a probate service, or support 42% agree that this will continue But the public view probate as a legal service.however consumers re changing their opinion

12 Business opportunities for Financial Advisers Estate Administration Legal and tax From applying for probate (or confirmation in Scotland) to dealing with inheritance tax, Estate Administration involves a significant amount of specialist legal and tax work. Protecting your family An estate administration provider should take on full responsibility and liability so that your clients don t have to worry. That means if there s a claim on the estate, they re covered. Dealing with property Property valuations and specialist insurance cover. Management of all aspects of the sale on your client s behalf should they wish. Paying inheritance Paperwork Valuing assets & debts Interim payments to beneficiaries quickly and regularly. Your client and their family should receive whatever they re entitled to as soon as possible. Dealing with HMRC, utility providers, resolving pension enquiries. These tasks are a burden at a difficult time. Completion of all of the paperwork, so your clients don t have to worry. As part of the estate administration process, everything has to be dealt with. Every detail should be managed on your client s behalf so they have complete peace of mind.

13 Business opportunities for financial advisers Did you know? There were 530,000 deaths in the UK last year. Rising to 800,000 by 2047 Approximately 50% of these had require professional support 750 people every day who will seek a professional service. 11,000 in 2047.

14 Business opportunities for financial advisers The opportunity This creates opportunities and benefits for Financial Advisers to: 1. Support existing clients: Deliver more value 2. Acquire new clients: Gain direct access to new potential clients in need of financial advice

15 Business opportunities for financial advisers Case study The client died in March The estate was worth 2.9 million The client s Adviser introduced their EA service to the Executor A law firm quoted to administer the estate for a fee of 2.5% of the estate value - 72,500 The Adviser provided their quote 11,525 The Adviser was introduced to the beneficiaries from the estate 1. The niece was delighted with the benefits of the service she received via her late Uncle s financial adviser 2. The beneficiaries were delighted that their inheritance was protected as much as possible 3. The Adviser was delighted to have helped his late clients family, whilst securing a number of new clients in the process

16 Business opportunities for financial advisers Case study The clients motherin-law, passed away. Mr P was the sole Executor His Adviser had previously introduced their EA service and the benefits it provided It was clear to Mr P that he would turn to his Adviser when the time came The estate, worth 300,000, was left in its entirety to Mrs B Mrs B used some of the money to pay off her outstanding mortgage For the remainder the Adviser was able to offer financial advice. The Adviser took her on as a new client with over 150,000 in cash to invest 1. MR P was relieved that all the work and hassle of acting as an executor was taken away from him 2. The beneficiary was delighted that their inheritance was protected as much as possible 3. The Adviser was delighted to have helped his client, whilst securing a valuable new client in the process

17 Business opportunities for financial advisers Conclusions The inheritance economy is driven by three key factors Probate sits within Financial Services Financial services need to be prepared, and act

18 Business opportunities for Financial Advisers If one of your clients parents passed away, would they call you? If one of your clients passed away would their children or spouse call you? Do you know how many of your clients are named as an Executor in another persons Will?

19 Business opportunities for financial advisers Thanks & any questions? Rachael Maskell Regional Sales Manager

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21 Hello We re Kings Court Trust Business opportunities for financial advisers

22 Business opportunities for financial advisers

23 What exactly does this mean? In the unfortunate event of someone s death, we re trusted to simply. take complete care of their affairs Helping families to move on Business opportunities for financial advisers

24 Setting up a Trust in the Will Varying the terms of a Will for tax purposes Arranging for a pet to be re-homed It s an excellent service and we have helped thousands of families to move on. We hope to help thousands more. Business opportunities for financial advisers

25 Don t wait, get in touch info@partnergrowth.kctrust.co.uk Business opportunities for financial advisers