Better later than never

February Retirement Strategy

The Society Of Later Life Advisers says now is the time for retirement advisers to decide whether to gear up to become later-life specialists and become part of what it thinks is financial services’ most promising sector.

The non-profit group, created by Jane Finnerty and Tish Hanifan, was set up to offer elderly people the chance to find local advisers who specialise in later-life financial advice such as equity release and long-term healthcare funding.

Hanifan says: “Twelve years ago, I set up Solicitors For The Elderly and soon realised that when dealing with older people, there were a lot of issues arising around funding care, selling the home and putting assets into trust. But it was a relatively new area and solicitors could not help so as a result people were not getting the right advice. I could see that this was a gap in the financial services industry.”

Three years ago, Hanifan and Finnerty set up the Accreditation for Later Life Advisers in partnership with the Financial Services Skills Council, then last year they created Solla as a means for people to find advisers with the right credentials to deal with their needs.

The group now has 100 members and it expects that number to grow as more IFAs realise the potentials of a growing market. It says that as more people are retired for 30 or 40 years, a new advice sector will develop.

Hanifan says: “Retirement planners plan at retirement so as to maximise income during retirement. But later-life advice realises that people stay in retirement for an awfully long time. An elderly person may have got great advice at retirement but as time goes on, their needs and requirements change and they need some specialist advice looking at the care planning, equity release and how to deal with changes of situation during retirement.”

As a result, Solla thinks that, post-RDR, a later-life adviser will be as common-place as an adviser special ising in mortgages, invest-ments or annuities.

Hanifan says: “It is time to start to think about what specialist IFA you are going to be in the future because the general practitioner model is going to become harder to maintain as IFAs increase their levels of professionalism.

“The higher the level of advice, the more complexity and the more complexity the greater the need to specialise.”

Those with the later life accreditation must specialise in products for those in retirement, including pensions, long-term healthcare funding and equity release.

While the pensions sector has weathered the storms of the last few years, the equity-release sector has been hit by providers leaving the market as well being cont-inually dogged by scepti-cism but Hanifan argues that it must be a central part of any later-life adviser’s business.

She says: “The Government has spent an awful long time encouraging Mr and Mrs Average to have the best possible tax planning tool they can have, which is owning their own home. If you think of the benefits of homeownership, it is a great way of saving for retirement. If we hadn’t been encouraged into homeownership, where else would most people be able to build adequate amounts of capital to fund retirement in a limited space of time? People have seen their home as a form of financial security for years now and now many want to access that.”

To achieve the FSSC accreditation, IFAs must have long-term healthcare funding qualifications as well as equity release qualifications so as to be able to understand the sector, even if they do not write that type of business specifically. Hanifan says this is crucial because equity-release and long-term healthcare funding will become more symbiotic in time.

More people want to fund care in their own home and one way to stay in that home is through equity release. The key is to understand them together

She says: “Equity release is very important when it comes to funding care. The trend is now moving away from that and people want to stay in their own home, something that the political parties have recognised. In the future, more people will want to fund care in their own home and one way to stay in that home is through equity release. The key is to understand them together.”

Hanifan says the need for later-life advice is going to become more acute as more people get older and have to be looked after for longer.

She says: “The Government has admitted that there will never be universal long-term healthcare for all and that means there will always be the need for advice for care funding.”

While longevity proves that there is money to be made in later-life advice, Hanifan is confident that those IFAs who see those benefits will not be put off by the accreditation.

She says: “It is not an exam, that is the biggest misconception. We do a one-hour face-to-face audit with an assessor - we do not go through the syllabus of the specialisms, we assume that they know that. The face-to-face interview is done as though you are dealing with an elderly client.”

Hanifan says this is crucial in deciding whether the IFA has the right specialist skill-set because dealing with eld erly people is different to any other financial services disipline. She says: “To be a good later-life adviser is not necessarily a question of a knowledge requirement, it may be certain soft skills - knowing how to deal with older people and communication skills.”

Hanifan hopes that more IFAs see the benefits of specialising in equity-release and long-term health care funding as more people struggle to fund themselves through decades in retirement.

She says: “The difference with the retirement market is that it is older people that do not have much time to get things right if they do not get the right advice in the first place. There is going to be a need for specialists who can make the most of assets during retirement.”

 

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