Even wealthier clients may have protection needs and if illness or tragedy strikes, a delay could have an adverse affect on the client and the adviser.
As a Leicester City season ticket holder and having gone through my own club’s tragedy earlier this season, it was particularly sad to hear of the tragic death of Cardiff City footballer Emiliano Sala.
After news broke that his plane had gone missing, it was disappointing to see how quickly the story moved on to squabbles over the £15m transfer fee payment – but as a financial adviser, I wasn’t surprised. In fact, I suspect that lawyers on both sides were reviewing contract clauses and insurance details within hours.
My lack of surprise was based on an understanding of the practicalities. Also, in my experience, we financial advisers sometimes see the best in people but occasionally the worst.
One of the many things I warn my clients about is that when someone dies, more often than we would like to think, everyone falls out. Sibling rivalries, family history, grief and money make for a volatile mix that can lead to even very close family members falling out. These problems are made worse by lack of preparation and foresight. For example:
- According to research from Unbiased.co.uk, 60 per cent of UK adults don’t have a will.
- A 2017 study by Resolution found two-thirds of the UK’s three million co-habiting couples think they have rights under common-law marriage.
- Stats also show that less than 30 per cent of us have any life insurance (let alone critical illness cover or income protection).
Obviously, these are all things it is our job to help with – so why aren’t we doing so with more success? Well, for some advisers at the wealthier end, day-to-day work often will not involve clients with significant protection needs – and the UK advice profession has moved somewhat in this direction following RDR.
Even so, wealthier clients still have important protection needs, and some matters (wills, trusts, powers of attorney, etc) will be more important.
The other thing might simply be the client or the adviser (or both) shying away from difficult and unpleasant conversations about death, illness or divorce. Sometimes it is best to just take the bull by the horns.
Recently, after congratulating a client on his recent engagement, I immediately asked him if he had considered arranging a pre-nuptial agreement. But whether it is to prevent inter-family squabbles or simply to help the client and their family in times of need, I think we should be looking to address these things sooner rather than later.
As recent sad events have reminded us, they can strike out of the blue, so in the event of a tragedy (or even just an illness) a delay could leave your client in a terrible situation.
Avoiding simple admin delays can be equally important, as both football clubs’ lawyers will have immediately focused on. As advisers, our best execution policies give timescales for investment matters, but not always for protection matters.
However, leaving that completed insurance application on your desk until Monday (as you rush to make your Friday tea) carries a very small but potentially catastrophic risk for you, your client and your firm.
Scott Gallacher is director of Rowley Turton