The government’s new trust registration service was launched in September. This means that the clock for millions of trustees to register their details is ticking. trust Before September 1, 2022. Failure to do this may result in fines, and larger penalties may be imposed if the government considers the action intentional.
This can raise some concerns, but the rules should actually be seen as a great opportunity for financial advisors to support potentially affected clients. In particular, they represent one of the many ways advisors can begin to brooch the important topic of intergenerational wealth transfer.
NS Trust registration service Announced in a limited format in 2017, it previously applied only to “taxable related trusts”. It has since been expanded to an estimated 2 million trusts, including all Express Trusts residing in the UK, but with some exemptions, including pension trusts and charitable trusts. This means that more clients need help navigating the new rules.
Not surprisingly, many trusts have been established with the transfer of wealth in mind, so this change is a great opportunity to support the practical aspects of trust registration. It is also an opportunity to review the solution and make sure it meets the client’s goals.
By 2047, an estimated £ 5.5 trillion is expected to pass across generations, according to a study by Kings Court Trust. This may seem too far for some to worry about. However, the study estimates that by 2027, £ 1 trillion will be in hand, which will be a much more pressing issue.
Talking to clients through the new trust register ensures that advisors who have spent years growing and growing their wealth will still play a role when their money flows across generations. It is just one of the full range of strategies used for.
It’s not surprising that we have a good relationship with our clients and their spouses, but many of the advisors we speak do not know their children. This carries a great risk. Whether it’s trust, a lifelong gift, or inheritance, wealth will fall into their hands in the near future, and it’s time to begin explaining the value of advice.
Similarly, advisors need to be aware that the younger generation is under different financial pressures, working in different ways and wanting to see different things with the people they work with. Examples of this are Millennials and Gen Z, who are interested in someone’s digital presence, socially responsible qualifications, and the ability to provide digital advice.
Annual reviews continue to be an important tool for starting to talk about the transfer of wealth between generations, and the new trust registration service can also be a catalyst for starting a conversation. Or you can do this by simply sending the message “I saw this and thought of you” and sharing the relevant information with the client. All of these methods accelerate trust in an ethical and transparent way.
Each advisor needs to take an approach that suits them and their clients, but it’s important that it begins to happen now. Not on the to-do list can have disastrous consequences for advisors across the country in the coming years.
Gemma Harle is the Managing Director of Quilter Financial Planning.
Opportunity for trust registration service
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