Lack of estate planning skills a risk for financial planners
The lack of professionals specialising in estate planning in Australia will cause a huge problem for the financial planning industry as their wealthier baby boomer clients enter retirement and succession issues become more of a concern.
Michael Perkins, a lawyer and lecturer on estate planning at the University of Technology, Sydney, said there are less than 5,000 professionals across the accountancy, tax, finance and law professions able to provide comprehensive estate planning.
Perkins and Estplan consultant Guy Thornycroft have brought to fruition a Financial Planning Association accredited Estate Planning Strategist Program that not only will help address this industry need, but will also provide financial planners who already have the skills and experience to do estate planning with the recognition that they deserve.
Thornycroft said the program will go some way to addressing the skills shortage in this area, although he doubted whether financial planners have thought about it enough.
“It’s a massive deficit that hasn’t really be thought about,” he said, adding that financial planners seldom take on a multi-generational view when dealing with their clients.
Thornycroft said there is also a concern around the tendency for financial planners without estate planning skills to refer their clients to a lawyer. He said this can create a problem as the planner is not always assured that the issue can be dealt with adequately by the lawyer.
Perkins wondered how many planners are aware that law schools stopped teaching succession as a compulsory part of a law degree some 15 years ago.
“So the average lawyer in practice who was admitted less than 15 years ago probably has not studied the law of succession, and probably does not have the depth of knowledge to deal with this,” Perkins asserted. “There are wills and estate and probate specialists out there. But on the balance of it, flat out across all the professions, you would probably be hard pressed to find 5,000 professionals nationally working in this area.”
Perkins said this comes down to the risks planners open themselves up to in giving a referral.
“If you are referring to someone who doesn’t have the competence to deliver the solution, watch out,” he said.
AUTHOR
Caroline Munro
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