More women are now recognising that making a will and getting their power of attorney in place is vital, which presents a great opportunity for financial advisers to onboard new clients.
However, it’s essential to know what your clients’ concerns are, be prepared for what questions they may ask, and tailor your advice.
When it comes to personal finance, women are still holding back regarding ensuring that important matters – such as who to pass on an inheritance to or putting someone they trust in charge of their affairs – are set up in accordance with their wishes.
However, things are beginning to shift up a gear, with a growing opportunity for professional advisers to provide a much-needed service.
Industry statistics show that more wills are now written by women (51.74%) than by men (46.2%), according to WillSuite’s 2020 Annual Report.
Sue Wakefield, Director at Zedra, a fund solutions provider, says: “Women now own 36% of small businesses worldwide and women are increasingly the primary earners in households in the UK. Despite these positive changes, until recently, women have often overlooked safeguarding their wealth and assets and protecting their families in the event of their death or incapacity.”
To make the most of this opportunity, it’s essential to tailor your advice to meet the particular needs of women. According to the FCA’s Financial Lives survey, a higher proportion of women than men say they have low confidence in managing money or knowledge of financial matters.
It’s also important to understand where, as a financial adviser, your remit ends, and the legal expertise of a solicitor begins.
A good place to start is to consider the sort of questions a prospective client may ask, so you’re able to explain things to them in a conversational, supportive, friendly manner.
A combination of empathy, understanding and expertise will go a long way in helping your prospect grow in confidence, build trust in you and become a long-term client.
Here are the sort of questions prospective clients looking for advice on will planning and setting up a power of attorney may ask:
Explain that with a will, your client can dictate exactly who gets what. Their wishes can be as simple or as detailed as they like, although they’ll need to employ the services of a solicitor to ensure they are legally binding.
A will is a way to ensure family members are taken care of, to leave assets or specific items to wider family and friends, to make contributions to charity and to ensure that a person’s overall legacy is administered in the way they’d like it to be.
Importantly, your client can specify who will care for any dependent children they leave behind. Point out that if a person dies without a will – known as 'dying intestate' – then UK law determines who inherits their assets, which may not be in the way they would like, and will take much longer for their beneficiaries to inherit.
Although DIY will-writing kits are available, advise your client that it's easy to make mistakes this way, which can be very costly to fix later on.
This is where appointing a solicitor is essential as they can help your client to make a watertight will for between £100 and £200. Advise them that they’ll also need to appoint at least two executors who are confident dealing with official matters to oversee the distribution of their estate.
These people will liaise with any professionals or organisations on behalf of their beneficiaries. They will also require at least two witnesses to read and sign their will, who are not beneficiaries.
Reassure your client that arranging a power of attorney is all about giving them peace of mind that someone they trust is in charge of their affairs if they’re no longer able to manage this themselves.
Essentially, it’s a legal document, where one person (known as the donor) gives another person (the attorney) the right to make decisions on their behalf.
When your client decides to set up an LPA, they choose a person – their ‘attorney’ – to act on their behalf and make decisions in their best interests.
The attorney can be any adult whom your client trusts to make the right decisions for them – so they may be a close friend or relative or a professional (such as a solicitor) who is paid to fulfil the role.
Explain that if their chosen attorney is not a professional, it’s important to give them plenty of time to consider before agreeing to the role, as it’s a huge responsibility.
LPA is the most common form of power of attorney. This is an ongoing arrangement with no expiry date that will allow a person to make decisions on another’s behalf. This document must be registered with the government, through the Office of the Public Guardian.
Once registered, it can be used immediately, with the client’s permission while they still have capacity, or it can take effect from when they lose mental capacity. Explain that there are two types of LPA:
Property and financial affairs LPA – This gives a nominated attorney the power to make decisions about money and property, including managing bank or building society accounts, paying bills, collecting a pension or benefits, or, if necessary, selling a property.
Health and welfare LPA – This gives an attorney the power to make decisions about daily routines (washing, dressing, eating), medical care, moving into a care home and life-sustaining medical treatment. It can only be used once the client is unable to make their own decisions.
You could mention that there’s also an ordinary power of attorney, which gives a nominated person authority to act on another’s behalf for a limited time period.
This can be useful if your client wants someone to make decisions for them temporarily – for example, while recovering from an injury or illness, or if they’re taking an extended overseas trip.
It’s possible to specify a time period for an ordinary power of attorney or restrict it to specific activities – and this document doesn’t need to be registered with the Office of the Public Guardian.
Ask your client, what would happen if they’re suddenly unable to make their own financial and welfare decisions? It’s not something that anyone wants to think about, but it’s far better to put a plan in place so they’ll have peace of mind that their wishes will be met, exactly as they want them to be.
Explain that while many people think that their partner or close family members will automatically make decisions for them if something happened to them, this is not the case. Unless a power of attorney is set up, their loved ones would need to apply through court to access money, which can be a long, drawn-out and expensive process.
Explain that while we tend to associate poor health with old age, anyone of any age could have an accident or illness that affects their ability to manage their affairs.
This is why setting up an LPA should be part of every woman’s long-term financial planning, to protect themselves and their family members.
Worryingly, less than 1% of people in the UK have an LPA, according to official figures. Highlight that an attorney can only be appointed when a person is still able to make decisions themself, so it’s vital not to leave it too late.
Explain that to register a power of attorney, your client would need to submit the following forms to the Office of the Public Guardian. LP1F – to register an LPA for financial decisions LP1H – to register an LPA for health and care decisions.
They’ll also need to send out form LP3 to anyone identified as a 'person to be told'. Explain that they can do this themselves, or that they may prefer to appoint a solicitor to handle the application for them.
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