Missed opportunities in an ageing society
Financial advisers are not sufficiently embracing estate planning to cater for Australia’s ageing population, according to Australian Executor Trustees estate planning specialist lawyer Robert Monahan.
Speaking last week at the launch of his new book, ‘Estate Planning — A practical guide for estate and financial planning professionals’, Monahan said estate planning is “under-catered for substantially” within the planning sector.
“To the extent that many financial advisers in Australia do think about estate planning, it’s in the sense that it has to be represented in the Statement of Advice (SOA),” he said.
“To a large degree, it’s about getting clients to tick a box.”
Both clients and financial advisers stand to lose out from a situation in which many advisers are “simply ignoring estate planning”.
“One could say a lot of clients are not getting proper risk advice from their advisers, the impact of which will be seen over the next 20 to 30 years as the baby boomer generation passes on,” he said.
“A lot of planners are simply not focusing on what happens when a client passes away or loses their capacity to manage their affairs themselves.”
Monahan said he had co-authored the book as a service to financial planners, accountants and generally for those in the financial services sector.
“The purpose is to put down some of the fundamentals of estate planning and to help raise the profile of estate planning among financial advisers, accountants, and financial services professionals.”
He said dealer groups also needed to educate advisers of the opportunities estate planning offers in an ageing society where a lot of their current key client demographic will be passing on.
“There are already some proactive advisers recognising estate planning as a good business opportunity in being able to manage the transfer of the current client generation’s wealth to the next generation.
“These advisers are using estate planning as a way of embedding themselves in their client relationships and thereby [hope to retain] the next generation’s business into the future.”
He said both the risk adviser and the investment adviser need to be pushing estate planning to clients, because their clients listen to their advisers.
“The risk adviser is there in a sense to put the risk insurance for a client in place, but then what estate planning does is ask what happens to that money.
“It’s one thing to have a $1 million of risk insurance in place, but then how are you going to invest it in the most tax effective way on behalf of the beneficiaries?”
Recommended for you
As the year draws to a close, a new report has explored the key trends and areas of focus for financial advisers over the last 12 months.
Assured Support explores five tips to help financial advisers embed compliance into the heart of their business, with 2025 set to see further regulatory change.
David Sipina has been sentenced to three years under an intensive correction order for his role in the unlicensed Courtenay House financial services.
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
