Categories
Product in Focus Series

What is a Financial Asset Search (FAS)?

By Alex Turck on October 29th, 2021

Investigating a deceased’s finances is a large part of an estate administrator’s role during the estate administration process and this is one of their primary and most urgent jobs. But did you know that there is reported to be up to £1.2 billion of unclaimed assets in UK financial institutions, a figure which is increasing annually?

Added to this staggering figure, data from a 2016 FSA report found that a snapshot look at ‘gone away’ pension accounts has resulted in £200 billion of unclaimed pension money, while over £3 billion lies in National Saving and Investments, as yet repatriated to its rightful owners.

How is there such an enormous amount of money hidden within financial institutions and why does unclaimed money not always surface during estate administration?

Finances can become missed and unclaimed for many reasons, but the main causes tend to be unreported changes of address, ceases of activity on an account and inadequate record keeping.

According to research by the Bureau of Labour Statistics in 2019, an individual has an average of eleven jobs during their lifetime. If they are contributing to a pension fund in each of those jobs, pensions from earlier employment can be extremely easy to overlook, particularly in this era of digital communication when accounts are often managed online and there is little, or no, documentation being sent. In a report in the Financial Times Adviser in 2017, research conducted by Aegon, revealed that one in five people with multiple pensions has lost track of at least one of them, representing at least 21% of those questioned in their survey, an extremely concerning 6.6 million people.

Coupled with this, research on British moving habits has shown that we move home up to nine times in our lifetime and each time a person moves, financial institutions expect to be updated with a new address for communication purposes. In amongst the chaos and stress of moving, it can be easy to forget to inform each institution of your relocation. Failing to do so however, can result in numerous lost assets.

A third area of risk is demonstrated by the number of accounts in financial institutions where a person elects not to withdraw, deposit, or use a specific account. This results in them being categorised as inactive. HSBC states that “an inactive or dormant account is one that hasn’t been used in at least 6 months. Inevitably, since these accounts are not being checked regularly, they pose a significant risk of being involved in a fraudulent transaction.”

What are the implications for Personal Representatives and Probate Professionals if they don’t locate all of the Estate’s financial assets?

Executors, or Personal Representatives, are responsible for an estate ‘in perpetuity’ and have a responsibility to find the beneficiaries of a deceased’s estate and to confirm that those beneficiaries are receiving what is owed to them. Executors must locate all the financial assets in an estate so that they do not disadvantage the beneficiaries and must be able to demonstrate that they have conducted a thorough search of all financial institution records where assets may have been held by the deceased.

The implications of not doing so include but are not limited to; HMRC fines for understated Inheritance Tax, lack of financial viability for estate administration professionals to re-open files if the value of the missed financial assets is small, and additional costs to Executors incurred from having to rework and submit estate paperwork.

The solution – Financial Asset Search Service

Estatesearch are now the largest provider of the financial asset searches in the UK and have been pioneering new data and technology to help private client practitioners identify assets easily and effectively, via our award-winning platform.

Our financial asset search is an integral part of our Financial Profile Service which gives Executors, Beneficiaries, Deputies, Attorneys and Probate Professionals peace of mind during estate administration, through a comprehensive search which mitigates the risks and costs of missing assets.

It is vital to conduct a financial asset search on every estate being administered, as the vast amount of money unclaimed in UK financial institutions demonstrates that families of the deceased or the Executors do not know where all the financial assets are or about the existence of some of them due to them being located in dormant accounts.

How Estatesearch can help

Estatesearch offer Financial Asset Searches as part of our Financial Profile Service, which helps to identify the assets in the estate quickly, whilst mitigating risk.  We actively notify and search a comprehensive list of banks, building societies, investment managers, share registrars, pension providers and insurers of the deceased and notify the private client practitioner when a financial institution reports a ‘match.’ Responses and updates can be seen in real-time in our portal and include copies of any relevant correspondence, reference numbers and contact details.

Our Financial Asset Search Service offers an unrivalled level of transparent due diligence, a clear audit trail of all reasonable steps taken to locate the assets of the estate, and a fast and efficient search with a fully detailed, final report delivered on day thirty.

Click here for the rest of our ‘Product in Focus Series

For more information on any of our services visit our website www.estatesearch.co.uk, email hello@estatesearch.co.uk or book a meeting now to have a look at our portal.

Product in Focus Series

The Importance of Carrying out an Anti Money Laundering Check on the Deceased when Administering an Estate

Why carry out a credit bureau check during estate administration?

Experian Unclaimed Asset Register Search

Give us a call today, or send a message and we'll get back to you straight away.

0330 900 1700
helpdesk@estatesearch.co.uk