Spend long enough at any industry conference and you will inevitably pick up on a range of statistics that can often leave you scratching your head in bewilderment.
Which is not to say they’re inaccurate – far from it; indeed, they often make perfect sense and tell us exactly why we are in the position we are, or why we need to pay more attention to certain areas, or why we work in an incredibly important sector which can clearly help many more people than we currently do.
That was certainly the picture I took away from a lot of the sessions at our recent National Later Life Advice Conference, and specifically the array of statistics that were relayed to delegates, which I hope, allowed them to both see future opportunities and indeed to ensure they are providing advice and services to the very highest standards.
As a starter, lets consider the issue of vulnerability and how later life advisers need to ensure they have systems and processes in place not just to be able to identify potentially vulnerable people but how they might work through the advice process with them.
Jon Dunckley, who is director of the About Consulting Group, told us that 7.1m people in the UK are considered ‘functionally illiterate’. According to the National Literacy Trust that is one in five adults struggling to read and write, and it won’t need me to tell later life advisers what that might mean in terms of helping clients understand, not just your advice, but also the full extent of what they might be signing up for.
There is a lot of talk about the Consumer Duty and its requirements, and you can see from the above statistic that this becomes ever more important when you consider where a significant number of clients might be coming from, the nature of any vulnerability, and the importance of advice, communication and detailing the understanding of the client in these matters.
Now, traditionally the later life advice sector has been excellent in these areas; ‘soft skills’ enable the adviser to carefully and methodically walk a client through the entire process and, hopefully, to come out the other end with a fully-informed individual. But, add in illiteracy, or indeed any other vulnerability, and this reaches a new level that will require careful consideration and detailed documentation to show understanding.
In that sense, advisers might have to look at new ways of documenting what they do and how they have dealt with such clients. Taping conversations, videoing interviews, and the like, might have to become the new normal in order to satisfy both the adviser and the regulators. This is a belt and braces approach but it will go a long way to ensuring you’re not left with your trousers round your ankles.
Later life advice discussions often produce reflections on end of life for some customers. Again, I’m not suggesting that later life clients are at death’s door but as you will know, discussions about later life lending often end up in discussions about inheritance, or long-term care, or maintaining a standard of living further into the future.
So, let’s consider these statistics from Al Gardiner at Honey Group, who pointed out research from Canada Life that three in five people in the UK do not have a will. Plus, back in 2018, the Solicitors for the Elderly Group and Centre for Future Studies found that there were only 928k Health and Welfare LPAs registered, while 12.8m people over the age of 65 run the risk of developing dementia.
It’s a big difference and we need to be much clearer in our sector on the danger this presents to later life lending clients, particularly in a market dominated by drawdown products. I’ve long been an advocate of mandatory LPAs for every single equity release client, in order to mitigate against the risk of them losing mental capacity and not being able to access their money, probably at the very time when they would need it most.
Advisers are likely to see clients who present with this lack of will/LPA coverage every single day, and we need to do more in this area, because advisers are putting clients and themselves at risk if this is not headed off early. You don’t need to be an estate planner to do this, but you can – through Air – access estate planning specialists who will be able to carry out this work and give both you and your clients peace of mind.
Overall, those are just a few statistics that should illuminate you on what you are potentially dealing with, and what you will need to have/put in place in order to deal with those clients who fit those stats. It won’t be the same for everyone, but a system and process that starts from a point where you consider all potential circumstances is likely to ensure you are much more successful and diligent in dealing with each and every client.
Stuart Wilson is CEO at Air Group