Estate planning advice could be limited in the future to those clients willing to pay to see a top end of the market adviser, warns Standard Life's estate planning specialist Julie Hutchison.
Under RDR proposals, Hutchison believes estate planning has a natural home within the Full Advice and Focussed Advice tiers with some advisers choosing to specialise in estate planning work with trusts, trustee investments and IHT planning.
However, she is concerned little thought has been given to how estate planning will fit into the Generic and Primary advice sectors.
Hutchison says: “All potential clients have estate planning advice needs of one kind or another which affects the financial advice they require. How are these to be addressed in those two tiers?
“Financial help and guidance is to be offered, and products should be simple, perhaps using decision trees to reduce the cost of advice. Given the normal complexities which arise with families and their estate planning needs, however, it will be a challenge to see how estate planning discussions and advice can easily fit here.”
Operating as an adviser in the estate planning areas is not easy given the legislative background and taxation rules, Hutchison adds. The Finance Act 2006 also made life more complicated for those dealing with the IHT rules for making gifts to a trust.
“Simple solutions do sometimes exist with estate planning, but the advice process involved in identifying those solutions can be detailed and time-consuming. How is the adviser to be remunerated for his time spent in those discussions? ” she asks.
She says she fears a mass exodus towards Full and Focussed Advice by the estate planning specialists will leave a lack of people to service clients further down the chain. “The implications for the accessibility of estate planning advice would be serious,” she concludes.
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