roposed changes to inheritance tax rules, diverse client lifestyles and evolving protection needs are reshaping the financial advice landscape. For
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ADVICE
New tax rules and evolving client needs offer advisers the chance to strengthen relationships, bridge gaps, and deliver more tailored solutions
Shaping tomorrow’s advice landscape
Advisers now face a crucial opportunity to redefine their relationships with clients, bridging gaps in understanding and addressing complex needs with innovative solutions. From enhancing intergenerational planning strategies to improving protection conversations, the path forward lies in tailored guidance and proactive communication.
advisers, these shifts bring fresh challenges—but also significant opportunities to deliver tailored solutions and build stronger client relationships.
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landscape. For advisers, these shifts bring fresh challenges—but also significant opportunities to deliver tailored solutions and build stronger client relationships.
ixed income markets have gone through a painful transition, but the outlook is now a lot more positive. Volatility and risk are far from off the
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This Spotlight explores these issues, offering insights on how advisers can strengthen trust, deliver value, and navigate the challenges of a rapidly changing market. Whether tackling new tax considerations or reshaping protection advice, the potential to build lasting, meaningful client connections has never been greater.
Royal London: Supporting inheritance planning
What the autumn budget means for the adviser market
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Consumer Duty and the evolution of mortgage protection advice
The value of protection advice: bridging gaps and building trust
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ince Consumer Duty came into effect in July 2023, mortgage advisers have been engaging more with clients about protection needs. However, as the industry adapts, challenges remain, particularly around insurance and the need for a more personalised service.
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Since the implementation of Consumer Duty, mortgage advisers have made strides in addressing protection needs. Yet many of their clients still lack insurance – and the demand for personalised advice is becoming more apparent
One outcome of Consumer Duty has been the rise in adviser-client discussions about protection products. According to a recent study from the Association of Mortgage Intermediaries (AMI), recent data shows 41% of advisers now report an increase in these conversations, signalling a growing recognition of the need to address clients’ protection needs more comprehensively. Furthermore, AMI’s Making Protection Personal report found that 31% of advisers are broadening their recommendations to include a wider range of products, reflecting a move towards more tailored financial advice.
More meaningful protection conversations
While the increase in protection advice is promising, significant gaps remain in how advisers connect with clients.
Bridging the gap in client understanding
“It's good to see the progress by the industry in raising protection as a vital conversation,” says Carrie Johnson, Customer Life Stage Director – Protection at Royal London. “However,” she adds “there are many people still under-insured.”
Carrie Johnson, Customer Life Stage Director – Protection
These changes represent an industry-wide effort to bridge the longstanding gap in protection insurance uptake.
“It's good to see the progress by the industry in raising protection as a vital conversation. However, there are many people still under-insured”
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“It's critical that advisers make the most of their time with clients. As their trusted adviser, it's important to truly understand clients and their family circumstances”
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“Less than a third of consumers who recall their mortgage adviser asking about protection insurance said that the adviser took the time to understand their circumstances,” says Johnson, suggesting a need for deeper, more personalised conversations that focus on the client’s unique needs and priorities.
Past performance is not a guide to future performance.
Source: RLAM as at 1 January 2024, for illustrative purposes only. Data based on an analysis of business cycles since April 1973.
Solutions over products - the ‘customer first’ approach
Economic pressures also continue to weigh on households, which presents challenges for advisers. “Even though inflation has decreased, it’s still economically challenging for consumers,” says Johnson, adding that this contributes to the number of uninsured.
These findings suggest that advisers need to ensure they are providing a personalised service.
“It's critical that advisers make the most of their time with clients. As their trusted adviser, it's important to truly understand clients and their family circumstances and protection needs, to make it personal and bring to life the real value of protecting them and the people that they care about the most.”
Delivering fairness at the claims stage
The claims experience is another area where Johnson notes that the industry must continue to improve. “As the key moment of truth for customers, there is rightly an increasing focus on the claims experience, including how quickly claims are paid out. Speed is important, but so too is fairness,” she says, stressing that clients and advisers alike should feel they’ve been treated fairly throughout the process, whether at the underwriting stage, during claims, or at any point in between.
This focus on fairness and efficiency underpins the industry’s broader goal: to ensure more UK households are adequately protected and supported when they need it most.
The FCA’s upcoming review of the protection market promises to further refine the sector’s approach to Consumer Duty. Areas such as commission structures, fair value in product design, and competition will come under scrutiny. For advisers and insurers, this represents an opportunity to evidence their commitment to good customer outcomes while addressing systemic challenges.
Opportunities and challenges ahead
For example, ongoing delays in underwriting and claims processing risk eroding trust in the protection market. Tackling these issues will be key to maintaining the momentum gained under Consumer Duty. Equally, advisers must continue to enhance their role as educators and advocates, guiding clients through an increasingly complex product landscape with clarity and care.
By continuing to refine processes and strengthen adviser-client relationships, the protection market can meet the challenges of meeting clients’ insurance needs head-on. In doing so, it will create a more resilient and client-focused industry that delivers on the promise of Consumer Duty.
Changes outlined in the Autumn Budget 2024 will reshape the inheritance tax landscape when they come into effect in April 2027, presenting advisers with new opportunities to address client needs
he UK Autumn Budget 2024 has introduced changes to inheritance tax (IHT) planning that could present both challenges and opportunities for financial advisers.
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Among the key developments is the increased inclusion of pension assets in IHT considerations, which will likely capture a broader segment of the population, extending beyond high-net-worth individuals to include mass affluent clients.
The Autumn Budget has created a turning point for the financial advice sector. While the changes to IHT rules bring increased complexity, they also present advisers with an unprecedented opportunity to expand their client base and demonstrate the value of professional guidance. By embracing holistic strategies, engaging in intergenerational planning, and maintaining ongoing communication, advisers can position themselves as indispensable partners in navigating this evolving financial landscape.
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So, what does this all mean for advisers?
The new rules mean that more individuals, including those previously considered below the IHT threshold, may now face liabilities. “It’s going to drag people into paying IHT much more often, just because having to add the pension assets on top gives that element of risk that the customer might want to go and get some sort of protection for,” says Jennifer Gilchrist, Proposition Specialist at Royal London.
“I think advisers will have a trickier job on their hands, but there is so much more opportunity out there now,” says Wynn.
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“Never before have advisers had such an open door to speak to more customers”
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Broadening the IHT net
This broadening of scope has shifted IHT from being an issue for the wealthy to a challenge for individuals with combined pension and property assets, which presents opportunities for advisers.
“The IHT consideration affects more people –never before have advisers had such an open door to speak to more customers,” says Fi Wynn, Royal London’s Head of Protection Propositions. “This is where advisers can really come into their own for customers that perhaps didn’t feel they had a need for advice before.”
While a bigger client base is certainly an opportunity, the changes also bring a corresponding increase in complexity, which presents its own challenges.
Advisers must now provide more holistic advice, encompassing trusts, gifting strategies, and protection products tailored to individual circumstances. However, there could also be a shortage of supply. “There is a concern that there are not enough holistic advisers to meet the demand,” says Wynn.
In addition to this potential lack of advisers, Gilchrist notes that advisers will also need to revisit existing clients’ plans to ensure they remain fit for purpose under the new rules. “Some policies might have increase options, but it could be the options for increasing existing policies are not as much as they potentially need,” she says.
The growing demand for intergenerational planning further adds to the complexity. Advisers are increasingly required to have conversations not just with their clients but also with beneficiaries. “The right answer might be to gift to grandchildren for example, so the adviser would need an effective communication strategy for the whole family unit,” says Wynn.
Despite the challenges, advisers who adapt effectively stand to benefit.
They may find that clients traditionally viewed as asset-rich but cash-poor now require protection solutions such as whole-of-life policies or term products. These products, while complex, allow advisers to align mitigation strategies with clients’ evolving financial circumstances.
Providers also have a critical role to play in supporting advisers through these changes. Wynn stresses the need for “joined-up propositions to help advisers navigate this.” A collaborative approach between advisers and providers, she says, will be key in ensuring clients receive tailored and effective solutions.
“Evolving existing propositions so existing clients get the same quality of solutions as new clients is a win for everyone”
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“Some policies might have increase options, but it could be the options for increasing existing policies are not as much as they potentially need”
Jennifer Gilchrist, Proposition Specialist
Fi Wynn, Royal London’s Head of Protection Propositions
Inheritance planning is increasingly complex, requiring advisers to address intergenerational needs and evolving regulations. Royal London offers support through expert guidance, tailored training, and innovative protection solutions
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nheritance planning is an increasingly important focus for financial advisers, driven by recent budget changes and the growing complexity of tax and trust arrangements. But Inheritance planning means navigating intricate tax and trust structures. So what
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options do advisers have to ensure they provide the best possible outcomes for their clients?
The company strengthening its IHT proposition by launching Joint Life Second Death Term to offer a more affordable solution than traditional whole-of-life policies.
Inheritance planning is rarely straightforward. “With complex situations come technical questions,” says Jennifer Gilchrist, Proposition Specialist for Royal London. Recognising the need for specialist support, Royal London has established its Corporate and Estate Planning Protection Specialists (CEPPS) team.
Navigating complexity with expert support
To meet the evolving needs of clients caught in the IHT net, Royal London has also enhanced its range of protection solutions.
Expanding the product suite
"We’re excited to have just launched the Joint Life Second Death Term,” says Fiona Wynn, Head of Protection Propositions at Royal London. “This affordable option for couples covers IHT liabilities, ending at age 90, and pays out after the second spouse’s passing to help manage inheritance costs effectively."
“The team can support advisers in answering those questions when providing one-to-one support,” says Gilchrist. "So, we have the technical support in place that advisers often lack access to. With varied client situations creating complexity, our team is regularly called upon to provide expert guidance tailored to individual needs."
In addition to protection products, Royal London’s broader group offerings, such as equity release, provide further tools for advisers addressing clients’ inheritance planning needs.
efaults have been on the rise since 2022, when higher interest rates from central banks across the world started to feed through into
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higher borrowing costs for companies. But higher interest rates have caused less pain for companies than many investors expected. As a result, default rates are likely to peak much lower than they have in previous central bank tightening cycles. If this is the case, it has implications for portfolio positioning.
Through a combination of technical expertise, training, and product innovation, Royal London offers comprehensive support to advisers facing the demands of inheritance tax (IHT) planning.
"Our team also delivers regular training throughout the year, including webinars on various topics and providing advisers with CPD,” continues Gilchrist. “These sessions focus on helping advisers navigate regulatory updates, such as those coming into effect in April next year. This ensures they are prepared and confident in adapting to changes."
This new addition complements Royal London’s existing portfolio, which includes guaranteed and reviewable whole-of-life products, as well as trust propositions and gift options. Wynn adds, “We feel like we have a suite of solutions within protection that can help advisers speak to customers about how they might mitigate the tax bills they might now be facing.”
As changes to IHT regulations come into effect, advisers must adapt their strategies to engage clients in meaningful conversations. Royal London’s proactive approach ensures advisers are equipped to navigate these changes.
“These developments give advisers a chance to review their clients’ portfolios and develop strategies that address future risks effectively,” says Gilchrist. “By planning ahead, advisers can ensure they’re ready to manage these challenges.”
Wynn underscores the importance of intergenerational communication, saying: “Advisers need to start talking with beneficiaries and exploring options like gifting to grandchildren. This creates an opportunity for holistic advice that benefits the entire family and strengthens long-term client relationships.”
Preparing advisers for future challenges
Building confidence in complex times
Inheritance planning remains one of the most intricate areas of financial advice, demanding both technical expertise and a deep understanding of clients’ needs. Through its specialist CEPPS team, tailored training, and innovative product suite, Royal London aims to empower advisers to navigate these complexities with confidence.
“With varied client situations creating complexity, our team is regularly called upon to provide expert guidance tailored to individual needs”
“Advisers need to start talking with beneficiaries and exploring options like gifting to grandchildren”
Advisers have a critical role to play in bridging gaps, building trust and ensuring clients see the real value of comprehensive protection planning
he UK protection advice market faces its own challenges, including widespread misconceptions about financial advisers and a significant lack of engagement with protection policies.
“There are many factors at play in the growing advice gap issue,” says Gregor Sked, Senior Protection Development and Technical Manager at Royal London.
According to research from Royal London, there are an estimated 39 million non-advised adults in the UK – highlighting a significant missed opportunity to address protection needs.
Closing the advice gap
Protection advice, therefore, offers a clear avenue to demonstrate the broader value of financial guidance.
The disconnect between awareness and action
“We know there is a common perception that financial advice is only accessible to those with large sums of money, and with the UK having a substantial level of income inequality compared to many developed countries. Those on low incomes, don’t have a lot of money, and advice is possibly not something they’re actively considering, yet this could be a very at-risk group, particularly for those in the rental sector who, we know don’t have protection.”
Misunderstandings about what advisers offer are a common barrier to engagement, with 45% of consumers believing advisers are primarily motivated by sales, while 29% thinking advisers only provide guidance rather than tailored recommendations.
This disconnect highlights another opportunity for advisers to better communicate the tangible benefits of policies like income protection and critical illness cover. As the market evolves, fostering this understanding could be pivotal to closing the protection gap.
Addressing these issues is critical for both bridging the gap between advisers and consumers and highlighting the value of tailored financial advice.
These perceptions can potentially prevent individuals from seeking advice or engaging fully with their adviser, leaving essential protection policies like life insurance and income protection underutilised.
Even when recognising the importance of protection policies, many consumers fail to act. For example, while 53% believe income protection is important, only 7% hold a policy. Similarly, 63% acknowledge the significance of life insurance, yet just 30% are insured. In contrast, more tangible protections like contents insurance see higher uptake, with 61% coverage among those who value it.
The role of advisers extends far beyond recommending insurance policies. They deliver peace of mind, helping clients navigate complex financial products and ensuring that their needs are met. This tailored approach adds immense value.
For instance, advisers offer bespoke solutions designed to meet specific budgets and needs. They also provide crucial support during claims, ensuring that policies deliver as promised when clients face unexpected challenges. Take the example of Stephany, a Royal London customer. Following a personal tragedy, her life and critical illness policy enabled her to take time off work, offering her financial breathing space and peace of mind.
Moreover, many policies include added features such as trusts, guardianship arrangements, and support services like therapy or practical assistance during crises. These additional elements further emphasise the holistic value that professional advice can provide.
Demonstrating the real value of advice
Communication strategies to drive change
The protection market must adapt to bridge existing gaps. Scaling advisory services, improving financial education, and highlighting the tangible benefits of protection are key priorities. To achieve this, the industry must focus on better communication to correct misconceptions and make protection more accessible.
“The growth of added value services can help to make protection real, it can make it tangible to clients”
Gregor Sked, Senior Protection Development and Technical Manager
“Misunderstandings about what advisers offer are a common barrier to engagement –with 45% of consumers believe advisers are primarily motivated by sales”
“Over the last few years the protection industry has focussed heavily on bringing added value services to life with clients,” says Sked. “We cannot lose momentum with this and need to continually be talking about these services with clients at the initial point of sale and beyond.”
“There’s no denying that insurance can be difficult to engage with; you can’t see it, you can’t touch it, and it’s a discussion based around death and illness. The growth of added value services can help to make protection real, it can make it tangible to clients.”
For advisers, the value of offering protection advice extends beyond fulfilling regulatory obligations. It can strengthen client relationships, enhance business reputations, and generate additional revenue streams. Engaging with clients regularly through policy reviews or discussions around changing circumstances not only improves retention but also uncovers new opportunities to add value.
Protection advice also plays a crucial role in intergenerational wealth planning, an area where advisers can demonstrate long-term impact. By addressing clients’ vulnerabilities and evolving needs, advisers can build lasting trust.
“There is no better time than now to shake off the perception that protection advice is a ‘one and done’ service, the extensive features and flexibilities of modern protection policies mean there are so many touch points to engage and re-engage clients about the need for insurance,” says Sked.
Real-life examples of how protection policies have positively impacted clients can help advisers showcase their value, fostering greater engagement and understanding. In parallel, demystifying processes like claims handling and policy maintenance can further improve trust and uptake.
Addressing the UK’s protection advice challenges requires a sustained effort to engage clients, challenge misconceptions, and demonstrate the broader value of advice. By focusing on tailored solutions and emphasising the tangible benefits of protection, advisers can build stronger, more meaningful relationships with their clients.
A path forward
