BR Report 2019

6 7 OPENING STATEMENT REPORT OVERVIEW FROM SOLLA ACKNOWLEDGEMENTS AND THANKS Society as a whole continues to age: with 18% aged 65 and over and 2.4% aged 85 and over [ONS 2016]. Whilst this is a cause for celebration it is nevertheless the case that with increased longevity comes the need to balance the requirement for income to fund the kind of retirement the client wants, with their desire to pass on wealth down the generations and to do so in a cost effective and tax efficient way. However, whilst Estate planning has always been an area important to both older clients and their families, later life advisers often see a major client concern around retirement in the worry that care may be needed in the future. If care needs are high then the option of meeting the cost entirely from income is unlikely to be available and the client will have to resort to using capital, significantly eroding their assets. This worry often leads older people to defer tax mitigation strategies such as estate planning which can have a potentially detrimental impact upon the efficacy of their planning as timely estate planning always achieves the optimum outcome. Sadly, the government has not yet implemented Part 2 of the Care Act 2014 which would have brought in some of the Dilnot proposals and, in doing so, would have given older people more assurances against the So, a big thanks to: Andrew Aldridge, Belinda Thomas, Chris Pearce, Desmond FitzGerald, Grant Callaghan, Jane Finnerty, Jerry Price, Kevin Gillibrand, Laurence Callcut, Marcus Maisey, Stephen Daniels, Tish Hanifan and Tom Hewitt. Their input is invaluable, but needless to say, any errors or omissions are down to us. We have relied upon MICAP for most of the data that we have based the report upon. MICAP is part of the same group of companies as Intelligent Partnership. We also carried out our own extensive desk research by examining brochures, investment prospectuses, mystery shopping providers, and trawling through the websites to verify their data. The report is made possible by our sponsors, who have contributed copy to the report and supported us by helping to meet production and printing costs. So, a big thanks to Blackfinch Investments, Deepbridge Capital, Downing, TIME Investments and Triple Point. Learning objectives for CPD Accreditation By the end of the report readers will be able to: Understand how BR sits within the current IHT landscape Define the recent market impacts on AIM-based BR offers and how providers seek to mitigate them Identify trends in BR investment offerings Evaluate popular sectors within BR investments, including their robustness in the face of current geopolitical conditions Ascertain the current views of advisers on BR including concerns and preferences Benchmark current products and providers against each other on key investment criteria Tish Hanifan & Jane Finnerty Joint Chair of the Society of Later Life Advisers (SOLLA) We couldn’t do this without the help and support of a number of third parties who have contributed to writing this report. Their contributions range from inputting into the scope, sharing data, giving us their insights on the market, providing copy, and peer reviewing drafts. potential for care fee funding to result in catastrophic loss of their assets. The long-awaited government Green Paper on Social Care for Adults has been delayed several times now and there is still no clear timeline for its delivery on the horizon. The need to balance these different objectives makes it essential that a financial adviser has a good understanding of the range of financial options available when helping clients with later life financial planning. With longevity a factor, clients still want to see a level of growth in both their capital and their income for a much longer period whilst ensuring they do not completely run down their resources and are able to leave legacies which are as tax efficient as possible. Clearly, not everyone is achieving this balance between lifetime financial needs and estate planning strategies as official figures show that HMRC collected a ‘record amount’ of inheritance tax (IHT) in the 2017/18 tax year. What’s more, the total number of UK estates liable to IHT has increased every year since 2009/10. Later life advice needs to integrate all of these conflicting considerations and requires skilled and knowledgeable accredited later life specialist advisers who understand the full range of options available, including those outside of the more traditional gifting and trust methods. Investments that qualify for Business Relief have shown an increasing popularity in recent years amongst both advisers and investors as they offer greater flexibility and speed than many other conventional solutions. However, the BR market is constantly evolving, with new entrants coming into the market to increase the options available. It is therefore essential that advisers stay up to date with the market and have a good understanding of the current BR options as well as knowledge of how the current open investment opportunities compare to the past in terms of key investment metrics. This latest report covers these developments in BR and analyses the current market metrics to give a useful overview of fees and charges as well as providing an open discussion about past and future market movements to inform the professional later life adviser.