Golden opportunity for planners

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Baby boomers have been likened to a football in a hose pipe – as they age, they create surges in different industries. The latest surge is expected to come in the estate planning sector of financial planning.

This could provide a great opportunity for planners, but many advisers don’t have the knowledge to service these clients effectively, according to Chan & Naylor non-executive director Ken Raiss.

“Estate Planning is a legal issue and documents should be prepared by lawyers but accountants and trusted advisers should have a better understanding to pre arm their clients before they go to a lawyer,” he says.

“People are very trustworthy, they understand their financial adviser – their trusted adviser. So I find that they’re in a good position to holistically look at a person’s overall financial position.”

Raiss says that there is a large part of the industry with a very low knowledge of estate planning and the issues clients face, such as:

  • Who to give the money to
  • Is the money protected
  • What are the tax consequences
  • Is super money treated differently
  • What happens if there is a dispute and the will’s contested
  • What happens if the client is in a coma

He says estate planning is becoming a hot topic because parents are wary of losing money to the family; through marriage, divorce, second marriage and so on. The biggest hurdle for advisers is understanding those practical issues and getting their clients to think about them to decide how to spread the family wealth.

Raiss says the problem with a standard will is that people leave assets directly to descendants. They could then be lost if the person gets sued or has a family rearrangement. Leaving income to children also poses a problem because children under 18 get taxed at 66% if they haven’t worked for the income.

It’s also a case of ‘physician heal thyself’, and this could be the downfall for advisers. “The number of advisers or accountants that I speak to that don’t have a will is alarming,” says Raiss.

“We say ‘if you’re going to go and get a professional, go to a professional that’s actually done it themselves’.”

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