Powers of Attorney and Dementia – Don’t leave it to late

A diagnosis of dementia is extremely difficult to come to terms with, both for the person who is diagnosed and for their families.

Sadly, as the population in the UK is ageing and the dementia risk is understood to increase with age, these diagnoses are likely to become more common.

In Scotland alone, over 90,000 people are living with dementia, which is a term used to a variety of illnesses and conditions causing an impairment and a decline in intellectual functioning.

Those suffering from dementia often leave it too late to sign over a Power of Attorney to family members. It is essential to deal with legal matters while still in reasonable health and of sound mind.

If anyone would like to have a chat about any concerns they may have about giving the Power of Attorney to someone else, please feel free to give us a call. We will be happy to listen and help where possible.

Vulnerability – A challenge for us all.

Do you think you are Vulnerable Client? Probably not if you’re a young fit and healthy individual who makes astute business decisions every day of the week or someone who is responsible for others.

But wait a minute. Identifying where a client may exhibit vulnerability is a challenge, and one that the regulator has become more and more concerned about in the last few years.

There is a stereotype that clients are vulnerable through a reason of age, illness or infirmity, or due to a recent traumatic event. What about someone who is young, inexperienced, and may have no knowledge of financial matters.

And what about other not so obvious circumstances. For example, what about those seeking advice to transfer from a defined benefit pension. Would they be considered as being vulnerable?

In 2015, the FCA published an excellent insight into consumer vulnerability which focused on reasons for an individual’s vulnerability and identified good practice in dealing with these clients.

What about someone who is selling their business. These individuals – or families – are typically financially astute, used to taking risks, invariably they have made significant and impactful decisions. Should these individuals should be treated as vulnerable.

Selling a business, for most people, is something they will have little experience in, be of significant impact, and often be tied up with emotion. They need time to think, low pressure, and understanding that inaction can be less damaging than an action that is later regretted

Take Attitude to Investment Risk. The way people respond to information can differ from person to person and most advisers will, when explaining investment risk to their client, use numbers, graphics, verbal explanations as well as written descriptions. Is the same true for other areas of financial advice?

Some will respond best to meetings, but there are those who may not be able to provide their full attention for the period we, as advisers, often command. Some may favour an office meeting where they are free from distractions, others the comfort of their own home. Not everyone may share our command of technology.

Vulnerability changes with time – over the longer term individuals can become more or less able to deal with their financial affairs.

Some advisers have advocated an approach where all clients are treated as vulnerable. After all, giving clients more time to think and having trusted individuals in meetings are things that must be in those individuals’ best interests. But on the other hand, others may find this approach patronising.

And maybe what we are saying here is that, surprise, surprise, everyone is different and that we as advisers have to be acutely aware of this.

Of course, we also have to be aware that we as advisers can be vulnerable as well!

FCA publishes guidance on treatment of vulnerable customers

The Financial Conduct Authority (FCA) has published a 41-page piece of guidance for businesses on how to treat vulnerable customers better.

The guidance is split into a number of sections: understanding the needs of vulnerable customers, skills and capability of staff, product and service design, customer services, communications, and monitoring and evaluation.

Fundamentally, the FCA said it wanted to see firms doing the right thing for vulnerable consumers and have that embedded in their business culture.

The main aim, the regulator said, was for firms to be more focused on ensuring outcomes for vulnerable customers were at least as good as those of other clients. It also wanted to see greater consistency across both firms and sectors so vulnerable customers were treated fairly no matter what financial service or product they were buying.

Who are vulnerable customers?

For the purposes of its guidance, the regulator said a vulnerable customer is someone who “due to their personal circumstances is especially susceptible to detriment” and that its definition was intentionally broad.

It added: “Some consumers will be actually vulnerable because of their personal circumstances. Actual vulnerability can be permanent but is often transient because consumers’ circumstances constantly change. This can cause consumers, who had not previously been vulnerable, to become so at some stage of their life.”

The FCA said examples of vulnerability could include health conditions or illnesses that affect the ability to carry out day-to-day tasks, the low ability to withstand financial or emotional shocks, major life events such as bereavement or relationship breakdown, and low knowledge of financial matters.

FCA executive director of strategy and competition Christopher Woolard said: “Protecting vulnerable consumers is a key priority for the FCA and we want to see firms explicitly embedding the fair treatment of vulnerable consumers into their culture. Where we find that firms are not doing enough to ensure that consumers are treated fairly, we will take action.

“Firms need to take particular care to ensure that vulnerable consumers are treated fairly as they may be more likely to experience harm. The guidance should drive improvements across the industry, improving outcomes for millions of vulnerable consumers”.

Well done the FCA, say I.

Give youth a chance

Having been in this business for 30+ years, it is fair to say that I am not in the first flush of youth.   And that length of time in business has set me thinking about two very important points.  First, is financial services a career for young people? And second, if so, are young people taking it up?

My view is of course that it is an excellent career choice for a young person but are they taking it up?  I attend numerous seminars arranged by professional bodies and by insurance companies advocating their products.  What I see when I go to these events is a distinct lack of young people in the room.

“Where are they all?”

Traditional arguments against young people typically centre around the argument that clients of an older generation, who are usually the ones with the money, want advice from people of their own age group.   Would a person in their 50s or 60s, it is said, be prepared to really take advice from a veritable youngster?  Would they not prefer to receive advice from a man or woman who has seen a bit of life, found out about the problems that can suddenly overtake them and understand all the complex events that can happen?

Of course, there are practicalities to be considered.  If the client is in, say, his mid-fifties, does he I really want an adviser who is the same age or older than him? What if that adviser retires at the same age, or dies? Will that older adviser be able to advise the clients in their declining years, or will that client have to find a adviser in later life and start the planning process all over again?

This is, of course, particularly relevant to clients with large pension pots which require attention for maybe 30 years or more.

You also have to ask whether an adviser has to have the same sort of experiences as the client to be able to advise them. For example, unmarried advisers regularly give advice to married clients and similarly advisers who might never have claimed on a Critical Illness Policy, advise clients who have.

Its all about listening to the client, being aware of their aims and objectives and understanding their fears and ambitions.  You don’t have to be the same age as the client to empathise and advise. 

Many youngsters want to learn, pass on that knowledge and will give good responsible advice. 

No matter someone’s age, he or she may be able to teach us and our clients a thing or two. So why not give youth a chance?

Have YOU made a will?

Did you know that around 27 million adults in the UK have not made a will?

This can have serious consequences, especially if you’re a parent. Dying without a will means the law will simply run its course, often against your wishes.  It’s a huge risk that leaves you powerless over your assets.

Why A Professional Will Is Essential

The technical term for passing away with no valid will is ‘dying intestate’. If this happens, your money, possessions and property will be divided up according to the law, and the people you love most dearly could inherit nothing.

For example, if you have a life partner but are unmarried and die ‘intestate’, your partner would receive nothing in terms of the law. If you have children this can complicate things further, as the law often places them above your partner in the pecking order – and if you have children from a previous marriage or relationship, they could be completely passed by too.

Dying without a will means you have no control over who stands to inherit your assets and even worse, if you pass away with no close relatives, your estate could pass automatically to the government, who claim millions of pounds from this every year.

Writing a will can be easy and some people feel they save money by doing it themselves.  But more often than not, it’s tricky and you are well advised to get professional help.  It’s not that expensive particularly in relation to the value of what your estate may be worth.

The sooner you plan ahead, the sooner you’ll get peace of mind.  And if you use the services of a Solicitor or a Professional Will Writer, you will be asked to consider the following as a minimum.

1.                 Who exactly do you want your benefactors to be. Rather than letting the law decide, you can divide up your inheritance in whatever way you want.

2.                 Who do you want to nominate as your children’s guardians. If you have children under 18 and the worst does happen, you need to plan ahead for their future.

3.                 Who do you want your executors to be. Pick the person or persons you trust who will make sure your will is properly adhered to.

4.                 Do you have any specific wishes for specific possessions. Many of us have treasured heirlooms or keepsakes – a well-written will lets you pass these heirlooms onto the person or persons you want to have them.

If you would like any help or advice about selecting a Solicitor or Professional Will Writer, please feel free to contact us.  We will be happy to assist.

Savers urged to be vigilant after fraudsters steal £202m from pensions

I noticed this piece in the Mail on Sunday and found it to be very disturbing.

The Insolvency Service, which is a part of the Department for Business, has shut down some 24 companies guilty of pension abuse since 2015, according to this Mail on Sunday piece. Around 3,750 victims have been affected, including both individuals and businesses, with losses amounting to more than £200m. Eight company directors have been disqualified for a combined 57 years as a result of the victims’ losses, the article adds.

“There is no room for complacency,” warns Aviva head of savings and retirement Alistair McQueen. “We may spend 40 years saving, so we should spend more than 40 minutes considering our options at retirement.”

Consumer minister Kelly Tolhurst adds: “If you are approached to make an investment from your pension, always do your homework and seek independent advice. If you think you are a victim, report it to Action Fraud or visit the Scam-Smart website for further help.”

Please, if you know someone who is considering taking their pension without taking proper Independent Financial advice, try and persuade them to take advice from a Financial Adviser who is  regulated by the Financial Conduct Authority and who authenticity can be verified.