New research from life and pensions provider Friends Provident reveals that IFAs are getting to grips with the inheritance tax changes affecting trusts and wills brought in at the last budget.
Friends Provident’s research shows that, despite the speed with which the changes were introduced, over a quarter of IFAs (28%) say they have a good understanding, while 64% say that they have some understanding. Only 8% say that they are still in the dark.
Advisers also appear confident about recommending inheritance tax (IHT) planning solutions to their clients – 53% describe themselves as quite confident while 16% are very confident.
The new rules – which applied to new trusts from budget day and begin to apply to older trusts from April 6, 2008 – have had an impact on most IFAs, with only 9% saying that their client base was unaffected. Of those advisers whose clients have been affected, 50% estimate that the changes were relevant for up to 20% of their clients, while for 17% of IFAs this shoots up to between 21% to 40% of their clients. However, despite client bases being affected to varying degrees, almost three quarters (72%) of advisers report that the changes have not decreased average premium size.
The jury is still out, however, when assessing the impact on their own businesses. While 49% of advisers think the changes have created new business opportunities, 45% say that they have not.
The IHT changes came as a bolt from the blue, which shook the industry and left behind an air of uncertainty, said Christine Foyster, head of wealth management at Friends Provident. There was a real danger that consumers would switch off from IHT planning because of confusion surrounding the new rules. But, by gaining an understanding and continuing to advise with confidence, IFAs have been able to reassure clients and get back to the real task at hand…This is a great achievement and a real thumbs up for the industry.