Life expectancy in the UK has dramatically increased in recent decades. There are now more 65-year-olds in the country than at any point in history. And according to the Office for National Statistics, in 2013 720,226 of us will reach the state pension retirement age. Although the numbers will then reduce, more than 600,000 people will turn 65 each year until at least 2018. By 2034 23% of our population is projected to be aged 65 and over.
Consequently, the demand for financial services focused on the needs of older clients – retirement and exit strategies, estate planning and planning for long-term care – is also growing.
In the US, the American Institute of Certified Public Accountants puts the annual market for elder care accounting services at between $2bn and $7bn. It estimates the average practitioner’s fees range from $300 to $1,500 per month per client depending on the service provided.
While no such figures are available for the UK, there is no denying the fee-earning potential created by our ageing population.
Whether you are a sole practitioner or a partner in a larger firm, if you want to pursue a mature client base you need to understand how to market to it and win work.
If you can show your knowledge of the concerns of older people, this will help you break down the trust barrier
“Because of the banking crisis and their disappointment with the performance of their finances, older people especially are suspicious of any organisation associated with finance, including accountants,” says Dick Stroud, marketing consultant and co-author of Marketing to the Ageing Consumer.
So how do you win their trust? “Blogging and tweeting will not cut much ice with a sceptical 75-year-old,” says Stroud. “But if you are a long-established local practice with clients ready to vouch for you and if you can show your knowledge of the concerns and needs of older people, this will help you break down the trust barrier.”
Pensioners are increasingly IT-literate, so you do need an online offering, although Stroud warns: “You must ensure your website is older-user friendly.” This means breaking down the information into short sections and using larger fonts, clear navigation, minimal jargon and single mouse clicks.
When it comes to buying services, especially by those in their late 70s and 80s, their children play a significant role and may even be the key decision-makers. “The children might be your primary marketing target, not the parents,” says Stroud.
Your chances of signing up older clients will be increased if you position yourself alongside groups such as the Society of Later Life Advisers (SOLLA), Solicitors for the Elderly or the Society of Trust and Estate Practitioners (STEP).
“Consumers have confidence in these organisations. We’re often asked for recommendations,” says Tish Hanifan, joint chair of SOLLA and chair of STEP’s Kent branch.
First and foremost it is necessary to develop an understanding of the complex planning issues facing the elderly. “We’ve noted a growing interest from accountants in later life issues and STEP seminars. Ten years ago they would have shrugged off advising the older client as something for the legal profession,” says Hanifan.
The complexities surrounding care funding mean this expertise is increasingly necessary. “Accountants must understand the system and any planned changes,” says Hanifan. “Recent negligence cases arose because even though the professionals had given good advice in their field they failed to take in the bigger picture.”
Care home fees must form part of any succession, business assets protection and inheritance tax planning for an older client. “It’s a major issue, especially for our farming clients who are elderly and still own the high-value assets and run the business,” says Nick Park, director at south Wales-based Green & Co.
“It’s important to ensure everything is structured correctly – for example, that partnership assets are not vulnerable to care home fees.”
The older your clients get, the more likely they are to develop dementia. And diminished mental capacity raises issues of risk and trust and calls for greater patience, empathy and tact to preserve client relationships.
“I’m dealing with a partnership where the clients (a couple) are in their 80s and suffering from early dementia and where we have slowly been transferring the partnership to their son,” says Arthur Croker of Arthur Croker and Co. “The parents phone me not remembering what we discussed at the last meeting and asking why I fell out with their bank manager, which hasn’t happened. They’ve been my clients for 26 years so it’s upsetting on a personal level, too.”
While many older people tend to become forgetful and can take longer to process information, dementia is different, says Zoë Elkins, head of care at the Good Care Group. “A person completely fails to store new information. Often they will be trying to cover this up and cope and may become defensive.”
If you suspect a client’s mental capacity is diminishing, then broach the subject with them or a family member. “People should be encouraged to plan in advance for all eventualities and get their affairs in order. Do they have a Lasting Power of Attorney [LPA] in place? Have they made their wishes known? Have they planned for the what-ifs?” says Elkins.
While this could be a tough conversation it could also add value – to their business and to your practice. “What would the impact be on their business if they are no longer able to make decisions?” says Hanifan. “The last thing they (and you) want is business interruption, so you need to manage anything that threatens continuity.” The issue of LPA should be raised as a matter of good practice with all clients approaching old age while they are still in a position to make astute decisions.
“When planning for succession we raise this issue with clients every year to ensure they have dealt with it, that they are not retaining all the control and have people in place who are taking on the business,” says Park.
In Britain there are projected to be half a million centenarians by 2066, with government statistics indicating that a third of babies born in the UK in 2012 are expected to celebrate their 100th birthday
Making decisions and acting on instructions can be problematic before there is a formal power of attorney in place. “The transition of control may happen very quickly or very gradually, from a client’s child just sitting in on the meetings to them speaking on behalf of the parent,” says Hanifan.
“This kind of informal transfer of power is fine until you get to best practice and whether or not you are covered in terms of who your client is.”
With elderly clients there is also greater potential for conflict of interest, especially when adult children are bickering behind the scenes.
“You have different people involved in the succession planning process and need to ensure that it’s all done in everybody’s best interest,” says Park.
“The risk of conflict is higher when some of the family aren’t – and will not be – involved in the business. You may need to identify assets that can be separated from the business so their claim on the estate can be satisfied without destroying the business itself.”
You will probably have to make changes to how you communicate with senior clients to accommodate sensory and cognitive impairments. “I go and see them rather than have them coming to me,” says Croker. This puts them at ease as they feel safe in their home.
“I also follow up meetings with a letter because I’m aware they may not remember what we’ve discussed,” he adds.
Experts say if your client suffers from dementia you shouldn’t ask questions. “In a client/accountant scenario this will not always be possible but you should at least reduce questions to a minimum as they put undue pressure on people,” says Elkins.
“Don’t contradict them either, even if they say something unexpected.”
But it is important to listen to clients closely. “If they become repetitive they are usually repeating something that’s important to them,” says Elkins.
A mentoring course, while not specifically geared to working with the elderly, could help. Croker says, “I went on one 18 months ago and learned the difference between giving advice and letting the person tell you what they want to do.”
However, an elderly client’s wishes may not be in their best interest, so you need to handle this sensitively. “They may not be ready to hear this so you have to learn to pick up the signals, to work out when they’re ready to move to the next stage,” says Croker.
It’s also important when speaking to your client to keep it simple, says Elkins. “Use fewer words, minimise new information the client needs or will be expected to remember and repeat important statements to help them store what you say.”
Above all, be prepared to deal with more emotional issues. If you do a good job with the parents and their financial affairs, you are also likely to pick up business from their adult children.