The latest bulletin from the Pensions Policy Institute - looking at longevity and living beyond the State retirement age - sparked a discussion on the IFAonline desk questioning whether IFAs are missing a future business opportunity.
Until now, many advisers have operated under the belief their main purpose is to advise clients about the purchase of suitable financial services products in relation to their needs and lives.
However, there is a growing army of lifestyle planning intermediaries who are often asked questions by their clients outside the scope of financial services. “What sort of car should I buy given the image I want to project” and “which vehicle are most suited to my efficiency needs” are just two of the questions intermediaries have been asked in recent months.
These questions are totally outside their scope of knowledge, but were asked because the client trusts the adviser to perhaps know someone else who can help, and because some IFAs are now that involved in the planning of some clients’ lives.
This leads to the next idea: how many clients will genuinely want to continue to work in the same job and at the same pace, up to and beyond retirement, if there is a good chance they will live to the ripe old age of 90? If that is the case, how do people plan for a change in career, what type of career or job do they choose and more importantly, who do they turn to for help in deciding?
Given the pressure people face to continue to work until much later in life, people – particularly younger people - are already beginning to reassess how many years they intend to work in their main career, the lifestyle and pressures they operate under. Perhaps the new connection IFAs need to consider is some kind of business links with employment agencies, headhunters, careers advisers and other support bodies, as you would seek out with solicitors, lawyers, accountants and any other service a client might need.
It’s a little far fetched to think a consumer would willing accept careers advice from an IFA at this stage as helping people find employment is a totally different field of expertise.
But it is the adviser’s job to try and help the client prepare for life changing events, and many individuals now like to factor in a change of career at some stage so planting the support early is more likely to keep the client’s finances on track and remove some of the worries about seeking out new careers or job opportunities.
All this talk of a savings gap and living longer has failed to motivate clients in the last three years to put more money away – if anything clients are more inclined to spend now and seek out a life with lower living costs. If IFAs can do anything to at least ease the financial worry of growing older, building a raft of employment links would go a long way towards proving the adviser is genuinely interested in helping the client.
Not only is the client more likely to view the adviser as acting in his best interests, but with increasing regulatory pressure and lower margins, diversifying a business could also offer the IFA new career opportunities.
Click here to view yesterday's IFAonline story on longevity of men and women according to the PPI.
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