Delivering the right estate planning solutions for your clients
Few things in life are as complex as families. Working in a company that specialises in tax mitigation and estate planning, we deal with these complicated, and often tricky, family dynamics all the time.
Everyone who comes to us, through their Financial Adviser or via one of our professional partners, has their own particular needs and aspirations.
During a typical day, we take calls from advisers who might be looking at how to develop the right solution for someone with an extensive buy-to-let portfolio or someone else with a business that none of his or her children want to take on.
Many of these clients have complicated personal lives such as children with different partners or frictions among their chosen beneficiaries. A one-size-fits-all approach could never match these diverse and often quite sensitive demands. And of course, requirements keep changing as clients and their families move through different life stages.
Such issues have always been an integral part of everyday life, death and inheritance. But as people live longer, the challenges are heightened by the need to transfer wealth between what could now be five or more generations in a family. There is also ever more money at stake. Over the next 30 years, it is estimated that the Baby Boomer generation will pass on more than £5 trillion to their children and other beneficiaries.
Hopes for the future
What then do people want from estate planning? Obviously, they want the best for their loved ones. This includes reducing what could be sizable inheritance tax bill. But from my experience I’ve learned that there is also something deeper at play here. People want their hopes for the future to be heard, to be respected and reflected in the solutions that are put before them. They certainly don’t want to be pigeonholed.
The untapped opportunity
This is why I find it so surprising that the wealth transfer default still tends to be a one-size-fits-all. Most of the solutions on offer certainly lack the personalisation, ability to adapt and flexibility in delivering target outcomes that would be expected from other aspects of financial planning, such as pensions.
I also think that we as can industry could devote more attention to dealing with the complex and potentially fraught issues within an extended family. As my colleague Matthew Steiner outlined in his article ‘The £5 trillion opportunity’, this is an opportunity for Financial Advisers to deliver better outcomes for clients, differentiate their offering and develop relationships with beneficiaries and their children.
Set up to deliver
How then can we as an industry develop better matched solutions for all the different clients we serve?
Harnessing artificial intelligence, data analytics and other advances in technology is clearly an important part of the answer. Here at Stellar Asset Management, we’ve embarked on a major digital transformation programme across all our client facing and investment management services.
The results are enabling us to gain richer and more precise insights into individual client requirements, how these are likely to change over time and how they fit together with the needs of other members of the extended family. These insights help us to develop customised solutions, which can adapt to different circumstances and life stages, while enabling us to anticipate events that would benefit from advice and support.
The Five Cs of effective delivery
Yet, technology can’t deliver on its own. The relationships that sit behind it remain absolutely critical. As estate planning challenges become more complex, the human dimension is more important than ever. Here at Stellar, we’re also investing in ways to engage more closely advisers and their clients, while developing the collaborative networks to bring core service providers together. For me, the key priorities come down to the Five Cs: Closeness, Choice, Control, Collaboration and Continuity.
To better understand an individual client’s circumstances and what they most want for themselves and their families, advisers and providers need to listen. The more chance clients have to share their story and articulate their aspirations, the better the solution that can be designed for them.
Some aspects of the engagement can be delivered through self-service and digital channels. In turn, data analytics can enhance decision making. But when advisers and their clients want to discuss their future, we should always be on hand.
Here at Stellar, our people on the ground are seasoned professionals who know their communities, are willing to take the time to develop local individual relationships and are able to engage in ways you and your clients can relate to.
Personalisation is only as good as the range of choices available. Yet, in many cases, the most obvious option is to set up a trust to reduce a client’s inheritance tax bill. The problem is that a trust can take seven years to free clients from inheritance tax liabilities, while taking away control over their funds (more on this below).
By building solutions around the foundations of Business Relief, we at Stellar enable inheritance tax freedom after just two years, while delivering modest capital growth. Our Inheritance Tax Services also provide diversification, support mature UK based businesses and benefit from the asset-backed security of land or property.
Clients naturally want to retain control of their wealth and be able to enjoy the benefits. Yet by tying up funds in trusts or gifts, they may have to relinquish control of and access to their money.
Rather than locking capital up in trusts, we can not only offer greater choice, and the opportunity to retain ownership and control of capital for life.
In a complex world, it takes more than just Financial Advisers to deliver the right solutions. That’s why we at Stellar have brought together a network of specialist partners to form Stellar Partner Services. This community of professionals provides holistic solutions across areas ranging from company sale to wills, family wealth planning and Power of Attorney.
Our account managers are building active professional communities on the ground. They know the local financial advisers and the ‘go to’ professionals who can best support them in each individual case.
Wealth transfer is far more than just what happens when people die. Rather, it’s a continuous intergenerational process that runs throughout peoples’ lives, from paying for a child’s university education, through to selling or passing over control of a family business, or making provision for later life care. Great solutions look across all the different generations and what they might need as they move through life.
Together we can deliver
So, as an industry let’s embrace the estate planning challenge and turn it into an opportunity. By working together to create the right products, harness technology and forge long-term relationships, we can deliver the best outcomes for you and your clients.
If you would like to discuss any of the issues in this article or find out more about how we can support you in delivering the right estate planning solutions for clients, please get in touch with one of our team today on 020 3195 3500 or contact firstname.lastname@example.org.
Written by Daryl Hine
Stellar Asset Management Limited does not offer investment or tax advice or make recommendations regarding investments. Prospective investors should ensure that they read the brochure and fully understand the risk factors before making any investment decision. The value of investments and the income from them may fall as well as rise and is not guaranteed. No assurance or guarantee is given that any targeted returns will be achieved. Forecasts of potential future results are not a reliable indicator of actual future results.
Stellar Asset Management Limited of Kendal House, 1 Conduit Street, London W1S 2XA is authorised and regulated by the Financial Conduct Authority.