Half of IFAs have 'no idea' how to financially protect people with a learning disability

Almost half of independent financial advisers (47%) have ‘no idea’ how to protect people with a learning disability, and over a third of financial and legal professionals (35%) do not feel confident advising clients who want to leave inheritance to a loved one with a learning disability, according to new research by Mencap Trust Company.

This is putting the estimated 147,000 people in England with a learning disability at risk of losing vital benefits or becoming victims of financial abuse. 

Well-meaning family members wanting to provide for them after their deaths may leave them a gift in their will as an ‘outright gift’, but this can backfire. Leaving a large sum of money directly to an individual with a learning disability can result in them being stripped of their state benefits and leave them highly vulnerable to financial abuse.

Worryingly, 85% of legal and financial professionals surveyed failed to fully understand these risks, and 75% failed to properly understand what a learning disability was.

Over a third of IFAs and financial planners (35%) said that they do not feel confident advising families who want to financially protect someone with a learning disability or who want to leave inheritance or a lifetime gift.

This lack of confidence was despite nearly nine in ten survey respondents (87%) saying they had received training on advising clients with a beneficiary who has a learning disability.

Almost two-thirds (65%) of IFAs failed to correctly identify that a specialist trust was the best option to support a client leaving a large legacy to a beneficiary with a learning disability accessing means-tested benefits.

Just over 1 in 5 (21%) of all financial and legal professionals confessed they wouldn’t know where to find information to get advice or support on the issue, while a similar proportion (20%) said they would rely on AI as a primary information source.

But nearly all of those surveyed (99%) said they wanted to learn more about the issue.

David Raeburn, director at Mencap Trust Company, said: “Every day we hear heartbreaking stories of families who have left inheritance for their loved one with a learning disability to give them financial stability – only for that money to be put at risk because it wasn’t protected by a trust.

“Maybe the family wants to provide their loved one with financial stability, additional money for therapies or to do the hobbies they love but instead their benefits are stripped away, and they are exposed to financial abuse.

“There are two simple ways that IFAs and financial planners can prevent this happening and give their clients the best advice. First, ask the question: Does the person you want to leave inheritance to have a learning disability or other vulnerability? Secondly, understand how a specialist trust can help.

“We are really pleased that financial planners have said they want to learn about how to better support families of people with a learning disability. We are offering a short, free downloadable guide at mencaptrust.org.uk/adviser_resources to help with this.

“We also hope to work with chartered bodies and the IFA community to ensure IFAs and financial planners feel supported on this important issue and no one with a learning disability misses out on the financial advice they need."