Demand for financial advice leads to concerns
18th Mar 2016
One in five lawyers are concerned that financial advice asked for by clients may go “beyond their core expertise”.
New research undertaken by Bower Private Clients has revealed that nearly two out of five law firms have seen a rise in demand for personal financial advice from clients leading to worries about regulatory concerns.
The research found that 38% of firms have experienced an increase in requests for advice in the past 12 months, with one in three forecasting a rise in referrals to independent financial advisers.
It also revealed that 78% of firms routinely made referrals.
As well as this, the research also revealed concerns among lawyers regarding current arrangements, with 20% worried that some of their advice goes beyond their core expertise. However, no lawyers admitted to providing detailed advice themselves.
In addition to this, more than two thirds of lawyers cited an increase in property transactions as the main reason for the growing demand for advice. Meanwhile, a greater awareness of the need for inheritance (IHT) planning (6%) and a growing client base (50%) were second and third respectively.
More than half of practitioners cited IHT planning as an area where clients were looking for more advice. Advice on trusts (49%); divorce (46 %); and income and capital gains tax mitigation (38 %) were also cited as the popular financial advice enquiries for lawyers.
Three in ten lawyers received enquiries on accessing property wealth and equity release from clients.
The high-net worth adviser is anticipating a surge in demand for specialist advice and bespoke solutions for retired homeowners who need to maximise their property assets due to the upcoming changes regarding pensions. Andrea Rozario, chief corporate officer at Bower Private Clients, stated that “Pension rule changes are driving business for law firms but high property prices and the complex nature of estate planning are also major sources of demand.”
“The wealth tied up in homes is a potential source of retirement funding but people need to be properly advised,” he continued. The financial advice required means that lawyers will need to be aware of the changes so that advice given is not out of their expertise.