Wealth managers should widen their inheritance tax planning options to include later life lending as rising investment values increase clients’ potential exposure, according to Key Partnerships.
The referral and partnerships business of Key Group said advisers should establish relationships with later life lending specialists to give clients access to options outside their own areas of expertise.
Lifetime mortgages allow homeowners to release equity from their properties for retirement and estate planning. Key Partnerships argued that these products should form part of the options considered by wealth advisers, although it expressed concern that some may be unaware of their potential role.
The business pointed to gains in equity markets and inflows to investment platforms as factors increasing the need for inheritance tax advice. It said the FTSE 100 had risen by about 8% since the start of the year and 52% over five years, while the S&P 500 had gained about 13% and 74% respectively.
According to figures cited by Key Partnerships, UK investment platform assets exceeded £1.3 trillion last year, with quarterly net inflows into self-invested personal pensions of about £3 billion.
The business said more than four million people aged 55 and over were believed to be regular investors, accounting for a third of the UK total. It argued that this group could have a growing need for support with inheritance tax planning.
Damon O’Connell, director at Key Partnerships, said: “Clients are increasingly looking for IHT and estate planning advice and the strength of equity markets allied to record inflows to investment platforms indicate that many will need support.
“Wealth advisers are ideally placed to support clients and with more than four million over-55s investing regularly there is also a significant opportunity to deepen client relationships and provide additional value.
“The concern is that wealth advisers will stick to their area of expertise and not offer access to other relevant IHT planning options such as later life lending as they do not have the qualifications or expertise to advise on them.
“Modern lifetime mortgages and other later life lending products should be considered as part of the mix so that clients receive holistic advice.
“Strong referral partnerships with later life lending specialists ensure clients receive independent whole of market advice which can help deliver good customer outcomes whether they go ahead or not.”
