Technical
Xenia Taliotis 2 Jun 2017 10:30am

How practices are successfully entering the probate market

Xenia Taliotis finds out how accountants are taking advantage of probate accreditation to help clients throughout their lives

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Caption: Illustration: Phil Hackett

In August 2014, ICAEW gained the power to regulate probate – the first organisation outside the legal profession to do so. Since then, hundreds of member practices have gained accreditation to offer these services to clients.

Few have looked back, though uptake has been better for some than for others.

“We jumped straight in,” says Paul Stafford, partner at RDP Newmans. “The market was changing radically and we saw it as an opportunity to expand and support our portfolio of services. It seemed like a very obvious next step in our evolution, but I have to say that, two years down the line, we’ve not managed to convert the considerable interest shown initially into custom. I don’t know how other accountants are doing, but we’ve found that our clients are sticking with solicitors and we don’t want to be too aggressive in trying to poach business from our legal colleagues because, of course, we work closely with them.”

Clive Stevens, partner at Kreston Reeves, is a champion of probate. Like Stafford, he was very keen to offer an additional service to clients and was quick off the blocks to take the exams. For his firm, though, the experience has been wholly positive, generating £1.2m in revenue. While that is a relatively small income stream when seen in context of its total annual £33m turnover, Stevens is nonetheless delighted with their progress.

“We’ve put three of our own accountants through the probate exams and since our merger with Spofforths, last year, have gained another two lawyers who are regulated by ICAEW, so our investment in this is quite substantial,” says Stevens. “But so far so good. Our average fee for probate is £10,000, though we did have one exceptional case that brought in £104,000. And this year we have 42 live cases, so things are looking good.”

Like RDP Newmans, Kreston Reeves is mindful and protective of its relations with solicitors, and there has been no hard sell to clients. “We’ve let it be known that we now offer probate by putting the information out there, but we’re certainly not pushing it hard,” says Stevens. “I don’t really see that we have to. Word is getting round organically, those who are interested are coming to us, and that’s how we want to play things. We don’t want to market this service aggressively.”

Things are also looking good for Morgan Cameron. Director Margaret Thornton was at the vanguard of accountants who registered to provide probate, her motivation being a desire to provide her clients with a cradle to (beyond) the grave service. “We felt we could step in to help our clients at a time when they were at their most stressed, grieving the loss of a loved parent or spouse. So far the response has been good from clients and through IFAs.”

Thornton says accountants will approach probate differently from solicitors. “We don’t replicate their processes, but apply our own to it. We’re used to doing accounts, so our documentation to prepare estate accounts uses the same procedures we use for other accounts. What we learnt very early on is that probate always takes much longer than people anticipate, and generally costs more than they expect, so we work hard to keep our clients informed. We update our clients every six weeks, giving them a new ETA, and an updated budget of costs.”

Stafford, Stevens and Thornton all agree that the rise in probate fees and the changes to the system are a “death tax” by any other name. “It’s another sum they will have to put down – in addition to existing IHT requirements – before they can access their inheritance,” says Stafford.

“I think most will start to look at ways of financing the fees through bridging loans and other financial solutions and here is where I think accountants could really benefit, because we have a strong grasp of our client’s finances and will be well placed to provide reports to banks to help people secure the money they need to access their inheritance. With this in mind, I think we could see more people approaching accountants in the near future. But only time will prove whether I’m right or wrong.”

Keys to success

Some people are reluctant to discuss their wills and post-death plans with families, but if you can encourage your clients to do so, you will save their beneficiaries potential stress, time and money. We all ought to be more open about our intentions, and what we’re leaving to whom.

Probate is not just a business service and mustn’t be treated as such. You will be dealing with people who are grieving, vulnerable, and need to be treated with empathy and sensitivity. Offer a professional service, but also offer a shoulder to cry on and a sympathetic ear.

Work out what it will cost. Setting yourself up to offer probate is expensive. You pay your fees to ICAEW upfront, before you’ve completed any cases and seen any money. And fees apply per person, not per firm, so the more people you register to do the exams, the higher your costs will be.

If you are surrounded by well-established solicitors firms then building up a strong client base won’t be easy without marketing and effort. And obtaining and retaining a licence isn’t cheap so make sure that it adds value to the services you already offer.

Five live tips

01: Plan, plan, plan

It is essential to have a plan in place before even considering starting to offer probate services. Knowing how you intend to promote and deliver the service is key to its success.

02: Research

Know what you are getting in to and be certain there is a genuine desire locally for probate advice. Ask yourself if the payoff will be sufficient to make it worthwhile. And don’t alienate solicitors by trying to poach their clients.

03: Be realistic

Attitudes are changing, but progress is slow, so don’t expect a sudden rush of clients leaving their solicitor to come to you. You have to sell your services to them.

04: Market the service

If clients come to you before you are licensed, you can pass them on to other legal advisers before taking them on when you’re ready. People need to be aware that you will provide the service, so shout about it.

05: Communicate

Make sure the message about your new service is spread internally. All staff from your receptionists up to your partners need to know that you offer the service so it can be promoted alongside existing support.

Probate represents one of the biggest new business opportunities to the accountancy profession. To find out more about this additional revenue stream visit icaew.com/probate

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