Third, annuity decisions need to be rationalised in terms of likely longevity just as annuities are priced against expectations for mortality.
What this means for the better off, whose longevity expectations are above average, is that their opportunity to be the winner among the pool of annuitants is better than average.
Divorce rates
It might come as a surprise that the average age of divorce is now over 45.
Older life divorces are increasingly the norm.
The group showing the highest growth in divorce rate is among all-female couples who account for three quarters of divorces among same sex couples (in England and Wales).
When they take place at a highly emotional time in life, this can lead to bad choices by the client.
More than ever, advice is crucial to ensure that tax-efficient splitting of assets will support your client’s longer-term goals.
In 2018 (the most recent figures) there were 118,000 divorces in the UK (ONS) yet only 4,632 pensions sharing orders (Ministry of Justice).
This ratio would seem to reflect a failure by some to take independent financial advice.
Diversity pays
As consumer profiles change, so must financial advice.
Broader thinking is needed to engage traditional clients (men) who might be worried about their spouse’s prospects when they are gone.
Diverse advice is also needed for the new owners of wealth – women.
They live longer, get better divorce settlements than ever, and control the household financial situation more than you might think, in particular in setting the priorities around the generations on either side, the younger and the elderly dependents.
Nurturing women’s needs is the key to tapping into a whole new style of client base and a whole new landscape for advice.
Patrick Ingram is head of strategic partnerships at Parmenion
