Trusts: A streamlined service

  • Ian McKenna
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Protection markets are seeing a new wave of technology and innovations from which advisers can benefit. Ian McKenna highlights a trust service.

Last year the Finance & Technology Research Centre spent considerable time with advisers exploring what would help them write more protection business.

The most consistent message was an urgent need to make setting up contracts easier. With the exception of some firms that write protection only, having examined the business models for a wide range of different types of adviser, the demand for more streamlined and consistent processes is overwhelming.

The protection industry does not adapt to change easily; it will take time to persuade organisations that are set in their ways of the need to work differently.
Last month a COVER feature looked at some of the new initiatives being developed to address this, although, with the exception of the new Quote+ system from Direct Life & Pensions, these services will not be available for some time.

In the meantime, advisers seeking change may need to take smaller steps. One example of a service available now that can deliver valuable benefits to advisers is the new Trust Wizard from Breeze & Wyles solicitors.

This provides the adviser with a simple way to create a trust form that has been populated with all the necessary information completed and simply needs to be signed by the necessary parties and posted to the life company.

For the vast majority of insurers, it even provides the exact address to which the form should be sent. Breeze & Wyles takes responsibility for the wording of the trust form itself.

Provided the adviser has all the necessary information to hand – details of the settlors, trustees and beneficiaries – it takes literally a couple of minutes to create and print all the documentation the client will need to sign, even including the covering letter for the client to use when returning the trust.

After initially selecting the life office providing the new contract (Aviva, Ageas, Bright Grey, Friends Life, Legal & General, LV=, Pru Protect, Scottish Provident, Partnership and Zurich have information in the system), the adviser chooses the type of trust required. Absolute, Discretionary, Flexible and Survivor’s Discretionary trusts are provided.

The user then selects the contract type. Fixed Term life, Whole of Life, standalone Critical Illness and combined Life and Critical Illness plans are supported, with Relevant Life to be added shortly. The system then opens the relevant trust wording for the adviser to add details of the Settlor(s) or Donor(s) trustees and beneficiaries.

Any addresses entered once can be reused with a single click. Up to four trustees or beneficiaries can be included within the standard wording, with any others being recorded on an extension sheet.

Users then allocate the individual percentage to provide for each beneficiary, with the final amount being validated to ensure a 100% total. Advisers confirm whether the contract is a new policy then add the application date, or an existing one, so adding a policy number.

Finally, details of the life assured are entered. The adviser can then preview the trust and, if they are happy with it, press confirm, which will download the trust form so the trust and a covering letter to be used to return the fully signed document to the insurer are created.

The proposition has been designed to support both advised and non-advised propositions, so with an increasing number of advisers launching direct‑to‑customer offerings in the post-RDR world, this may be particularly useful.

There is widespread recognition in the industry that not enough protection plans are put in trust, despite the fact that taking such action is invariably beneficial for all parties. In addition to the tax benefits to the client, there is substantial evidence that such policies have a far better persistency rate, meaning there is a much greater chance the policy will stay on the books.

Despite this, while every life company writing any volume of protection has an online application process, when it comes to trusts, few include this important element. One of the main reasons advisers are so keen to see more streamlined and consistent new business processes for protection is that these can significantly reduce training and administration costs within their businesses.

Embracing the Breeze & Wyles Tax Wizard enables an adviser to take a consistent approach to all trusts created for new protection business for virtually all insurers. This alone probably makes it worth the £5 per application cost.

The service can be accessed from www.breezelaw.co.uk/trustwizard. Advisers can choose to charge considerably more to clients for such a service, with some very brief online research suggesting a client asking a solicitor to create a suitable trust could be looking at a charge nearer £150.

This is a simple and elegant way for advisers to address an important issue in a consistent way. It would be great to see more services built so simply.  n

Ian McKenna is managing director of the Finance & Technology Research Centre

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