There is no better time for financial advisors to enter the divorce and separation market according to a new report from membership body Resolution which estimates the value of the opportunity at around £1/2bn.
‘Unlock the divorce and separation market; a £500 million opportunity for financial advisers‘ has been published by Resolution in partnership with the Personal Finance Society and highlights the growing need for specialist financial advisers in family law. Estimated at £500m annually, the report identifies a sizeable opportunity for financial advisors to support family law practitioners, highlighting the increasing roles played by solicitors, arbitrators, mediators, family consultants, barristers and divorce coaches which all comes under the family justice banner.
Importantly, says the report, there is an acknowledged shortage of specialists, and with so many cases requiring specialist input, there is demand. One Resolution member, a family lawyer, said,
“99.9% of our cases are about the financial needs for the separating couple – how much they require to buy a house, what their mortgage capacity is. It’s about what they need in terms of an income. So that might be looking at investment to see what income this can provide for them. And importantly, it’s also about what they’re going to need at retirement… I don’t see that there’s any case where financial input isn’t needed.”
The report is aimed a financial advisers to encourage them to look at family law as a new route to market pointing to the 200,000 divorces annually, many of which need independent financial advice to enable them to prepare for what’s next. There are over 40,000 family financial orders made by courts in England and Wales every year and 6.8m cohabitants in the UK with little to no financial protection in the event of relationship breakdown.
If your income is derived from fiddling around with someone’s investments and charging for that privilege, you’re likely to be out of business within the next decade. People have figured out they can do this themselves online – with very little cost.”
said Steven, a chartered financial planner and member of Resolution. The ‘traditional’ model of financial consultancy work is ‘drying up’ suggests the report, and consumers are increasingly demanding an advice and service proposition based on market knowledge, strategic planning and objective guidance.
Another family mediator says in the report
“I would like to involve financial advisers more in all my cases, but at the moment there just aren’t enough of them working in this area. I have two or three that I am close to… but they are really, really busy!”
Melanie Bataillard-Samuel, National Chair of Resolution, said:
“We know from financial advisers who are already Resolution members just how invaluable their support can be to separating couples. At the same time, our members report a huge need for targeted professional financial advice to further support their clients going through family breakdown. So the potential market is huge.”
“Advising those going through a divorce or separation is a very specialist area. There are real opportunities for those financial advisers that are able to position themselves as experts in the field, and by joining Resolution they have great access to a large, unsaturated market.”
Mark Hutchinson, Membership Director of the Personal Finance Society, added
“The value of professional financial advice has been recognised by Government within pension freedoms legislation, as it increasingly is by other organisations and the public for areas of complexity such as retirement and tax planning. “Our 40,000 members continue to proactively develop their general and specialist technical knowledge as well as soft skills to ensure excellent client outcomes.
“The Resolution network provides a unique community for those financial advisers looking to be part of a multidisciplinary, collaborative professional advice team providing essential guidance for families going though separation and divorce.”
