Research by Skandia found that nearly half of UK advisers were unaware of what nominations were.
The little known feature enables policyholders to state who they wish to pass bond proceeds on to upon their death, in a similar way to a trust.
They are a legally recognised method of ensuring assets get passed on to the correct people, and mean proceeds can be passed on to beneficiaries without the need for probate.
Despite sharing some elements with trusts, nominations are not technically recognised as such, and nominated assets remain within the policyholder’s estate and continue to be owned by them until their death.
Skandia said that while most providers do not offer nominations, they may be useful in situations where clients are young and do not want to set the beneficiaries of their estate in stone.
Nominations can be applied for at any point in time and clients can choose either a revocable or irrevocable nomination.
The survey showed that advisers in Europe, Asia and the Middle East fared better than in the UK, with just less than a third being unaware of what a nomination is.
International specialist at Skandia International, Paul Schrijver, said: “In the UK, there is an opportunity for more advisers to become aware of the benefits of using a nomination. It is not necessarily an alternative to a trust, but may help in situations where a trust is not suitable.
“A nomination can provide a great half way house between a will and a trust, and can offer clients peace of mind knowing the assets will be passed to the right people on their death without the delay of probate.”
