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Spotlight on: Complex Families, Complex Finances

Complex Families, Complex Finances

Adviser opportunities

Understanding the needs and behaviours is key to segmenting your clients, it is no longer enough to rely on demographics or occupation alone.  Genuine conversations and asking the right questions are key to building the relationship.

Key questions

  1. What are their aspirations?
  2. How is their general health position?
  3. What is their cognitive capacity and could they be a vulnerable client?
  4. What is their appetite for risk?
  5. What are their main concerns?

Complex Families, Complex Finances



Considerations to grow your Business

Pete and Nadia won't be the only ones who will experience this type of financial situation.  This type of client group will increase in size and eventually overtake more traditional groups that are more financially mature.

We've looked at the challenges and opportunities this type of client will bring to a financial adviser.  Here are three steps advisers can take to help these clients:

1. Centralised Retirement Proposition (CRP)

Creating a CRP can help advisers adapt their advice and solutions to prepare for potentially dealing with more clients with these type of complex finances.  A CRP can help segment clients.  This will help advisers set out robust investment strategies and indicate how the client can achieve a sustainable income.

Have a CRP can help advisers de-risk their business along with better client outcomes.  It can help advisers manage client expectations on how much income they can expect, understand their capacity for loss and assess if they are, or could become , a vulnerable client.

One of the big stumbling blocks of developing a CRP is knowing where to start.  Some helpful information:



2. Essential advice and demonstrating value

The growth of this group over the coming years highlights a key dilemma for the industry. There will be many people in this group who require financial advice but believe they can’t afford it because of all the demands on their money.

Therefore to reduce costs by streamlining the advice process or, for example, reducing other costs such as investment costs will be key.

Optimising digital communication channels

There are significant signs that the gap in technology use between younger and older generations has been shrinking. Over 65s have seen the biggest increase in usage and this is set to continue due to the COVID-19 pandemic.

With the social restrictions the pandemic has brought, online activity has increased further. Using online tools, PDFs and other online activity can aid in keeping related costs down.

Bespoke charging models

Surplus money for this group is unlikely with their finances mostly allocated out each month. This could stop them seeking financial advice as the associated costs are seen as prohibitive. Establishing a bespoke charging model could mitigate these concerns.

A free of charge initial appointment is common, but new clients may not be aware of this. Making this clear in marketing communications could tip the balance to seek financial advice.

The challenge for advisers is how to help these clients cost-effectively,
for example by offering streamlined advice. This will reducing costs and save time. As long as clients are made aware of the structure of the service model at the outset, this can be of real benefit to both parties.


Automated servicing

An automated servicing system can help in financial advice, financial planning and wealth management practices. Automation can produce dynamic forms and guides along with graphical tools to aid clients understanding of the products they are considering. This can save time and reduce costs in the long-term freeing advisers up to build rapport with customers and fully understand their circumstances.

We’ve collated some articles which may help when looking at the technology available, what this means for advisers and the impact technology is having on business and society:



3. Retirement propositions

The traditional stages of retirement differ for this group compared to, for example, those who who are 'financially mature'.  This group requires the security of financial propositions being able to provide them with access to their money in retirement through pensions and property, plus support for their family in the future.

Based on this the key propositions for this group are:

  1. Flexible pension
    A plan is needed that can be adapted to suit your client's changing needs.  Ideally low-cost and potentially lets your bring all pension pots together under one simple plan.  Clients ned to be provided with the flexibility o take tax-free cash when required ad to choose to take a guaranteed income, pension drawdown or a combination of both.
  2. Protection
    Protection can help family members financially if the policyholder dies or becomes seriously ill.  If the worst happens, this cover could help children get on the property ladder or ay off an outstanding mortgage.  Workplace protection can also offer access to well-being support and services that are integral to the policy.
  3. Equity release
    Equity Release could be used for clearing debt such as loans or an outstanding mortgage balance.  Over 55s can unlock tax-free cash from their property, with flexibility over the amount they can borrow and whether any repayments are made.

"Optimising technology must be a key consideration".

Adviser tools

These online tools are free to use and designed to enhance client engagement 

Divorce and money calculator

This calculator provides an idea of a financial situation before a potential divorce settlement.  It also helps work out what a client has, what they owe and how they might split assets and finances.

Try calculator

Life expectancy calculator

A useful tool t help find out your clients average life expectancy, so that you can help plan their future and retirement option.

Try calculator

The budget planner

This online tool looks at your income and outgoings to help your clients understand and manage their budget.

Try calculator

CPD Reflection Statement

To obtain your CPD learning you will need to complete a reflection statement and save a copy as evidence of your CPD learning.

Download the CPD reflection statement.