The overwhelming majority of advisers discuss trusts and beneficiaries with clients but only three in 10 choose to follow through, new research from Royal London has revealed.
According to the findings, 8 in 10 advisers promote the use of trusts or beneficiary nomination during client meetings, with 66% doing so constantly and 15% frequently promoting their use.
The majority cited the need to help clients get the money to the right person (84%) as their main reason for doing so, followed by estate planning (64%) and providing good outcomes (51%). A further 46% of advisers promote their use to help clients make the journey faster and 30% do so as part of holistic planning.
Despite this, the uptake among clients remains low. Separate research from Swiss Re notes that 8 in 10 single own life term policies are not put in trust. Of those taken with advice, uptake is slightly higher but still only reached 3 out of 10 in 2022.
Jennifer Gilchrist, protection expert at Royal London, said: “While ensuring life cover is in place is the right thing to do, it’s only part of the process. For complete peace of mind, it’s essential that clients identify who the beneficiaries are, so it’s hugely encouraging that advisers are delivering value for their clients by instigating those conversations.”
Gilchrist said the Consumer Duty requirements place a strong onus on advisers taking all reasonable steps to achieve good outcomes for their clients and their beneficiaries, removing any risks of the life cover proceeds not being paid to the intended recipients.
“The findings are very clear, writing a protection policy in trust or under beneficiary nomination is already on advisers’ radar and is almost always a part of the conversation with a client. However, with such healthy numbers promoting trusts and beneficiary nomination, it begs the question why an active decision on who should benefit from life policies isn’t being made by more clients,” she added.
