Partner Content by Octopus Investments

Are you ready for the new beneficiaries of wealth?

“We had one client who passed away and his daughter, who had never engaged with me before, just took everything away.”

“I thought, hang on a second, this is a new generation coming through and I don’t think they are fully engaged in financial services or fully understand it. Do we want to lose all the hard work we’ve done to another adviser or institution?”

“I told myself I’ve got to get working with the beneficiaries a lot earlier.”

Estate planning is a great way to do this.

“What I’m finding is that when I get engaged with the beneficiaries, they’re paying a lot of attention. When they actually know what the wealth is they could inherit, they go away and do their research. Because they’re a younger generation, they will Google what I’m saying and come back and agree with what I’m saying. I know they’ve Googled it, because they’ve had no clue before and now it’s a very detailed email response. That’s fine, because the more questions they ask me, the more engaged they are.”

Adapting to younger generations

It goes without saying that younger generations have different needs, attitudes, and wants than their parents.

Dr Eliza Filby is a leading generations expert and she believes there are some key considerations advisers can keep in mind to have the best chance of retaining assets when wealth passes down the generations.

“Advisers should think about their current offering to younger clients in terms of three things,” says Eliza.

“The first, does your service and advice feel bespoke? You have a generation of younger clients who are expect customised experiences. Are you bespoke in your communications, in the delivery, in the wording, in the documents?”

“The second thing is to ensure your advice is gender neutral. We really need to banish from our minds the ideas and stereotypes around what a female life path looks like and a male life path.”

“And the third thing is to be educationally focused. What stands out from surveys of younger people is their insecurity about their financial knowledge. Are you upskilling them? Are you teaching them? And if so, how are you doing that?”

Family conversations

Eliza is passionate about how understanding generational differences can lead to better business outcomes.

“You may think what’s this generational analysis got to do with me and my advice business?” says Eliza. “Well, you're getting much more equality within marriages. Women are making much more of the big financial decisions. And children are having a much greater say in their parents’ financial decisions.”

Perhaps these social and economic changes are already impacting advisers. Research from Schroders found that 70% of women inheriting wealth change advisers within a year of their partner’s death.