Scottish Equitable's inheritance tax planning kit contains useful information for intermediaries on conducting a direct mailing campaign highlighting relevant issues to clients
Scottish Equitable International has put together an inheritance tax planning kit for intermediaries, complete with sample client letters and presentations.
Within the pack, the group has made some suggestions for intermediaries on how to conduct a direct mail campaign, highlighting inheritance tax issues to existing and potential clients.
Tax planning in this area opens up a wide variety of business development opportunities, allowing advisers to provide new services to existing clients and attract prospective clients, says Richard Leeson, sales and marketing director at Scottish Equitable International.
'The nature of this type of business also provides a way of building relationships with clients and their beneficiaries by opening up cross-selling opportunities and providing long-term benefits,' he says.
The group suggests that in planning a campaign, advisers need to set out the objective first, detailing how many leads the exercise should generate and what level of income this is likely to bring to the business. Once a budget has been set, a tactical plan will formulate the different stages of organising the mailing, looking especially at who is the target market.
Leeson says: 'A cost-effective way to put together a database is from a mailing list. These come in different types, such as business or consumer lists and cover a wide range of prospects, from architects and building service companies to executives and professionals. Mailing lists can cost between £150 to £200 per 1,000 names and will usually have a minimum order of 5,000.'
These mailing lists can be bought or rented from a list broker, details of which can be obtained from Lists and Data Sources (LADS) on 01372 463867. This group, which can also be contacted via its website at www.ladsonhouse.co.uk, offers two national guides containing details of more than 6,000 UK-owned business and consumer lists.
The lists also carry information useful for direct mailings, says Leeson, such as previous users of the list, available selections such as gender and any restrictions the lists may have.
He adds: 'Choose a list that is relevant to your mailing. For example, people who have luxury homes or own more than one property are probably more likely to be affected by inheritance tax.'
Scottish Equitable International also recommends that when looking at a mailing list, advisers should see how often it has been used, thereby avoiding overuse as well as ensuring the list has not been used by a competitor. Once a database of potential and current clients has been constructed, intermediaries starting their mailing should consider a few tips that may aid the process.
Leeson notes that a reply-paid envelope is an essential ingredient in making any campaign a success. To apply for a business reply licence, advisers can call Royal Mail on 0845 7950 950, to get details of its service and an application form.
According to the life office, the initial costs will be £100, £60 of which pays for a licence. The remainder acts as a deposit that will be deducted from the cost incurred on the first mailing using a business reply-paid envelope.
Once the mailing has been carried out, the cost of postage, first or second class plus a handling fee of 0.5p per item, will be charged.
The group recommends that if the mailshot is large, intermediaries may consider looking at a mailing house to organise collation and distribution.
To use a mailsort facility, an adviser must have at least 4,000 letters or 1,000 packs.
To get a better response to the mailing, Leeson suggests a number of follow-up techniques.
A follow-up phone call, ideally within a week of the initial mailing, can increase responses by between 50% and 100%.
If the resources are not there to manage this follow-up, the group recommends call centres can be used for this, although Leeson points out this can be costly. An incentive with a deadline helps deliver a speedier response, used in conjunction with a follow-up letter highlighting the end of any limited period offer. A letter containing a freephone number can also double the normal response rate of a mailing.
A further tip Leeson suggests is to post letters to arrive on a Friday or Saturday as people are more likely to read their post on the weekend.
How inheritance tax is calculated
The following amounts are excluded from an estate.
• Anything left to a husband or wife (provided he or she is domiciled in the UK) or to a UK charity or other exempt body.
• Any liabilities outstanding at death (these included credit card balances, loans and bills) and funeral expenses.
• After these have been deducted, if the total estate is worth more than £242,000, tax may be payable. The current rate is 40% on all assets over this threshold.
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