Advisers cautioned on clients' relationships
Planners need to be careful in how they treat a client's informal partner in their own advice records, according to York Family Law director Nabil Wahhab.
"They need to start treading carefully in how they describe that person," Wahhab said.
Some advisers in the industry have been contacting Wahhab in response to a recent article he authored in Money Management on relationship status implications.
Those advisers were now taking the issue of partner titles in their written records much more seriously and investigating the true nature of their client's relationship, he said.
In some cases, they were even making a record of how the client describes their relationship with a partner, he said.
If the adviser acts on the basis that the partner in question is a de facto partner, he could make a financial plan that involves that partner, creating evidence that these two people have a more significant relationship than they actually do, Wahhab said.
The adviser may have got it wrong and needs to ask the client more questions, he said.
Many clients were naive about the financial consequences of doing something, he added.
A client may have a new partner and may try to shift income to that partner to reduce their own tax liability because they think it's convenient, but there are significant consequences from doing that, Wahhab said.
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