Financial planning for later life can be overlooked by some clients who place more of their focus on making financial decisions that will affect them in the shorter term.
Advisers can bring real value by ensuring awareness of the different options available to support a financial future, particularly providing education on the various protections, such as a lasting power of attorney (LPA).
While some clients may be reluctant to think about the future – particularly the more negative ‘what ifs’ – it is a vital aspect of financial planning and it is important protections are put in place to prepare should the worst happen.
An LPA is a legal document that appoints one or more attorneys to help make decisions on someone’s behalf should they lose the capacity to do so themselves.
Many people are not aware of the benefits of having an LPA in place, not only for themselves but for their families. Alongside your usual financial-planning conversations, you should encourage clients to consider putting one in place to provide them with the peace of mind their wishes will be fulfilled.
The registration of an LPA also provides an excellent opportunity for advisers to build on the relationships they have, not only with their clients but with their attorney(s) too.
Having a strong relationship from the outset will enable you to develop a clear understanding of your client’s financial wishes, which would allow the attorney to continue to work with you on behalf of the client, should the worst happen.
Despite the considerable benefits an LPA provides, a study we conducted revealed almost 70% of people had not yet thought about setting one up. However, prolonging an application could leave people in a vulnerable position, whereby court intervention may be required to manage their finances.
The survey also revealed 93% of participants had organised a will, yet only 44% said they had registered for an LPA. 13% of those who hadn’t set one up said they were unaware of the benefits.
Though it is reassuring so many people have at least some measures in place should they pass away, there is a clear need for further education on how LPAs can offer a pillar of support should they need it. This goes hand in hand with sound financial planning.
Applying for an LPA has become much easier over the years, as applications can now be completed online at a low cost. However, it is important to note the Office of the Public Guardian has strict rules in place that can cause applications to be rejected, so it is important you work closely with clients and support them in applying as soon as possible, making sure the information provided is accurate to avoid unnecessary delays.
Rachael Griffin is a tax and financial planning expert at Quilter
