SOLLA: Understand power of attorney to differentiate your business

Hannah Godfrey reports...

Advisers should familiarise themselves with what clients can and cannot do with power of attorney if they want to work closely with solicitors and accountants, Tish Hanifan told delegates at PA360.

The Society of Later Life Advisers (SOLLA) founder and chair (pictured) said fully understanding power of attorney can differentiate a business to potential professional partners like solicitors and accountants who may be seeking to work with financial advisers, and vice versa.

“It’s very unlikely the person who comes to see the financial adviser is the older person themselves. It’s very often their family, so the issues around capacity and who makes decisions for others are key in the later life market,” she explained.

“In terms of business opportunities, making sure you have familiarised yourself and know the principles around what people can and can’t do with powers of attorney is key, because that will mark your business out as someone for whom it will be easier for solicitors and accountants to work with; they really do need to work with financial advisers who have an understanding of the issues about the nuances of working with someone with a power of attorney. Capacity issues are key to this.”

Hanifan said professional solicitors and accountants often come into the advice process by working on inheritance tax planning and inter vivos gifting.

“People are concerned about protecting their assets, and care funding is a big part of that, so getting the right kind of advice at the right time is absolutely key,” she added.

Must consider care or risk bad advice

Hanifan said pension freedoms mean those who consider themselves to be pension advisers have no choice but to consider the impact of care, or else risk giving poor advice.

“Pension freedom may be a great thing, but greater choices bring in greater complexity, so for people who would consider themselves to be pension advisers, they will now have to be looking at what the impact of care is,” she continued.

“If you’re looking at making a decision around what you do with your pension, it’ll be hard to give good advice to a client without recognising that they may not need care, but if they do, that will have a big impact on it. To help a client make useful decisions around pension freedom, it’s important they they’ve looked at where care might fit into that.”