Handling the client handover
Planning firms need to get better at transitioning clients to a new adviser when the original adviser retires, says Equity Trustees head of private wealth Geoff Rimmer.
Advisers who take over a retired colleague's client base don't always have the same "loyalty" or "empathy" towards their new clients as the retired adviser - and this can result in clients leaving the practice, said Rimmer.
A common complaint from clients is that when their own adviser retires they are often shuttled between two or three advisers from the firm until things "settle down", Rimmer said.
The problem was particularly evident during the global financial crisis, he said.
"When things started to get a little tough and all that existed was the information on file and the advice itself, that's when the loyalty to firms got tested," said Rimmer.
Having clients leave because they are unhappy with their new advisers is not only bad news for the planning practice - it can hurt the bank balance of the retired planner too, said Rimmer.
"If you're the exiting adviser and you're waiting on your final payment - which is subject to clients hanging around and revenues holding up - you've missed out," he said.
The problem stems from the fact that advisers are usually around the same age as their clients, and both the adviser and their client tend to retire at around the same age, said Rimmer.
But the first few years of retirement are often when the client needs their planner the most, he said.
"The profession is slowly recognising that when a client retires there is likely to be another two or even three decades of advice needed for them, their spouse, family and other dependants," Rimmer said.
While making sure clients have enough money for the entirety of their retirement, it is also vital to ensure their aged care and estate planning needs are catered for as well, he said.
"Aged care advice tends to be event-driven and very emotive - there's not been a lot of thought put into that part of clients' lives," Rimmer said.
A lack of aged care planning can also impact payments to beneficiaries, since accommodation bonds often end up being paid out of the estate, he said.
"What happens is that you have some of the beneficiaries ending up with a disproportionate percentage of the estate," Rimmer said.
AUTHOR
Staff Writer
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