What you need to consider when advising older clients

This suggests a need for advisers to be able to talk to these clients about potentially quite complex issues, so they can understand the downsides of not taking enough investment risk and help them manage their assets in the best way to provide for their future.

Health and wellbeing

This topic gets a lot more attention today than it has in the past, with healthier lifestyles being promoted from school age onwards to help future generations cope better as they grow older. There are also government initiatives alongside this.

As we get older there is a need for a sense of security, belonging, continuity and purpose that, where present, leads to a healthier existence in body and mind.

The outcomes of an ageing population focusing on health and wellbeing are that individuals are able to stay in employment longer to provide for themselves in later life. More people working longer improves tax revenues and reduces the impact on state support.

Conversely, an elderly population is more susceptible to illness, with many people living longer with illnesses and potentially coping with multiple health conditions.

These put both financial and time pressures on healthcare providers, individuals and in many cases their families.

It also has a knock-on effect on the future supply and demand for care homes and the costs involved.

Financial advice has an important part to play in supporting society by reinforcing a positive approach to life, with holistic financial planning to support clients that consider all scenarios.

So what should you consider when advising the over 50s?

Life is so much more complex today, with the over 50s having more and more competing demands on their financial resources.

While we all know that not enough people are taking advice, the fundamental benefits of providing financial advice remain.

Here are our top areas for consideration:

1. Getting the basics right, starting with the correct levels of protection. No matter how solid a client’s financial planning, it can all be undone with a critical illness, long-term health issue or a premature death.
2. Protection requirements should be reviewed to ensure they cover any debts or to mitigate potential inheritance tax to preserve their estate for their beneficiaries.
3. Review pensions to understand objectives and how much needs to be saved, including fund choice and managing risk to provide the necessary level of income for their needs.
4. Understand the client’s ability and desire to work, for how long, and the income that this will produce. Talking about ageing can feel difficult, but it happens to us all. Does their planning reflect the different potential situations should they live too long, die too soon or are sick and disabled and reliant on savings, are they able to cope? Do they even recognise this as a potential problem? This should include consideration of relevant powers of attorney to support ill health and mental capacity.
5. Be comfortable with all mortgage options, including retirement interest-only and equity release variations and their suitability.
6. Ensure the financial needs of the family are co-created with both partners. As UBS has pointed out, women view wealth differently to men and expect a client experience to align with their values and goals. A professional financial adviser needs to develop solutions that support gender equality. You should also encourage the over 50s to promote financial advice to their family members to start the advice and support process sooner. 
7. Understand that financial planning is for life, and that all financial plans need to take into account the likely changes over the next 25 years. Plans need to adapt and change and retain flexibility to meet those needs. Later life planning is a difficult and often sensitive issue with the prospect of borrowing later in life that may take away value from an estate for future generations.

What about the future?

Here is some final food for thought. If you are encountering 20 to 30-year-olds who are starting their financial journeys now, their values are very different from those who are already 50 plus.

What will their priorities be? Will they want to take more or less risk?

Will they commit to home ownership? What will their aspirations be?

Fundamentally, the basics of financial planning have not changed, but attitudes, aspirations and economic realities have.

As long as you have an open mind to the differing and evolving needs of your customers, help them define clear goals, advise on what can happen in the whole range of financial situations, and take their risk appetite and capacity into account, you can add value throughout your clients’ lives.