Estate planning pitfalls:
over half of clients engage with advice too late
- Over half (54%) of IFAs say clients seek advice too late in the estate planning process
- 14% say clients fail to go through with agreed plans, while a further 14% make financial commitments prior to speaking with an IFA
New research from Canada Life has uncovered the most common pitfalls that clients fall into when seeking estate planning advice.
The most common pitfall by some distance, according to over half (54%) of financial advisers, is that clients seek advice too late in the estate planning process.
This is followed by failing to go through with the agreed plan, cited by more than one in ten (14%) IFAs, while a further 14% say clients make financial commitments prior to speaking to a financial adviser.
|Engaging with an adviser too late||54 %|
|Not following through with the plan||14 %|
|Making financial commitments prior to talking to a financial adviser||14 %|
|Not talking to their beneficiaries||8 %|
|After implementing the plan, changing their finances without consulting their adviser||6 %|
Figure 1 – Most common estate planning pitfalls
Just under half (48%) of financial advisers say that some of their advice was incorporated into a client’s will after speaking with them, rising to 52% of single adviser firms.
Neil Jones, Tax and Wealth Specialist at Canada Life, said:
“Clients are missing out on tax planning opportunities that can leave their beneficiaries on the hook for unnecessary inheritance tax.
“Things like the seven year rule on gifting require long term planning, while phasing an annuity requires careful forethought but reaps incredible dividends for the right person. It can make the adviser’s job harder if the client has already sold or gifted the family jewels before they talk to a professional. Such as decision can have significant implications for future planning and create issues that can loiter for many years.
“Failing to leave enough time to consult a financial adviser is an estate planning pitfall that is almost on par with failing to consult one at all. We need to engage with clients as early as possible – potentially before an IHT issues exist. The only way to effectively cut through red tape is to tap into the years of experience that a financial adviser possesses.”