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What advisers are saying: A wealth of opportunity

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There is a huge opportunity for advisers to get their share of the protection gap through closing it. Oh, and that is an average “per person” gap of £100,000.

Importantly, it ticks all the boxes, contributing to: visible repeatable revenues, high margin, client retention and good cash flow. But closing it will require understanding, confidence and fluency based not just on thorough protection know-how but some really on-the-button business nous, communication adeptness, all underpinned by tax and trust expertise. 

Tax and protection, in particular, require better understanding, what with TAAR, GAAR and all that jazz.

Their combined effect on planning is significant and while getting it wrong costs (the client and the adviser if certain lines are crossed intentionally or otherwise), getting it right can deliver benefits that are really worth paying for. That HMRC views protection policies in trust favourably and not at all abusive – they do not reduce tax but are tax-effective – further underlines the client and business benefit.

So we are good to go in principle but, while nearly all advisers we spoke to recently claim to take a holistic approach to planning, wealth management protection seems rather under-cooked – with 44 per cent of advisers failing to routinely incorporate it in planning. 

Eighty per cent agree protection should be part of the wealth creation/preservation process but only 40 per cent see a significant opportunity. For the most part, perceived client inertia and cost were two very inter-linked barriers. Furthermore, the underwriting of protection was seen as a brake, particularly relating to IHT protection where more stringent health checks are typically in place. 

But like most worthwhile opportunities, they will not come easily and pro-activity is required. Engagement will depend on successful articulation of the risk, painting pictures of a future the client does not want and the creation of justifiable anxiety.  That does not happen by accident and will depend on a more intentional approach.

We will look at how next week but first a question paraphrased from something Seth Godin blogged a while back.

When you think back to the last 10 years of your career or your company’s history, how much of what you have not achieved is due to missed opportunities (the proposition you did not launch, the service you did not choose to incorporate and the effort you did not extend) and how much is the result of doing your assigned tasks poorly?

____ % missed   vs  ____ % incompetence

Now, compare those percentages with where you spend your time, your focus and your anxiety.

Phil Wickenden is managing director of So Here’s The Plan phil@soherestheplan.co.uk

 

Extracts from IFA interviews…

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