Advisers are reacting to a jump in enquiries about later-life finances by reshaping their businesses to address client concerns, according to research by Prudential.
A poll of advisers conducted on behalf of the insurer found almost nine in 10 (86%) of them had seen an increase in demand for advice on later-life planning in the past year.
Some two-fifths (43%) of advisers questioned said enquiries about long-term care had increased and 37% said they were now being increasingly asked for support with setting up lasting powers of attorney (LPAs). More than a third (34%) had been asked for financial advice about coping with physical and mental impairment in later life.
According to the Pru, the increase in enquiries about later-life planning is driving major changes in how advisers run their businesses. The study found almost half (45%) of advisers saying they have put in place processes to avoid potential regulatory issues while 32% were considering doing so.
More than one in five (22%) of advisers questioned were extremely concerned that clients were not taking the risk of cognitive decline and its impact on their financial management capability seriously enough.
The study found the rise of drawdown as a retirement income solution following pension freedom was an area of concern – particularly as clients grow older – with around three-quarters (73%) of advisers saying they were concerned it would create problems for firms with elderly clients whose decision making may be impaired in later life.
Key measures being adopted include urging clients to seek specialist legal support – again, around three-quarters (73%) said they raised this with clients regularly while two-fifths (38%) mentioned the need for help at annual reviews.
The research was conducted for Prudential by independent researchers Pollright in June and July among 101 financial advisers nationwide.
Prudential retirement expert Vince Smith-Hughes said the UK’s ageing population represented a huge opportunity for financial advisers but added: “They will need to be well prepared and ensure their procedures and work practices can support elderly clients, some of whom could be vulnerable.
“There is a noticeable change underway, with advisers seeing huge growth in business and enquiries, which they are adapting to very successfully. This is accompanied by new challenges too. The increasing numbers availing themselves of pension freedoms is set to stoke the demand for advice further still.”
SIFA development director Dave Seager meanwhile saw increasing longevity and the requirements to provide advice to vulnerable or potentially vulnerable clients as “fundamentally changing the financial services landscape”. “It has never been more important for advisers and solicitors to work together to ensure clients’ current and future objectives can both be met,” he said.
This is reproduced from Professional Adviser; all views are from the publication. This originally appeared online on 28 September 2018.
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