In Focus: Intergenerational Wealth  

Are advisers ready for the intergenerational wealth transfer?

FTA: Are advisers prepared for the next generation of wealth owners?

RV: When it comes to gifting via an investment, we speak with the whole family to ensure that everyone understands the wishes of the client.

The next generation of wealth owners are between 40 and 60 and I feel that most advisers find this a relatable age group; certainly most large accumulators are in this age group. 

My concern is the adviser population is generally not young, and whether we have the right amount of advisers to match their very different advice needs – both in practical terms and the way in which they like to operate which is mainly on-line and through technology.

FTA: Where is the biggest gap between advisers and the next generation? 

RV: If there is not a link between the adviser and the inheriting generation, advising them can prove fruitless. The gifting generation are, in my experience, always very keen for their beneficiaries to meet with their adviser and receive advice.

I think technology and platforms, the wealth of information on the internet all make the wealth adviser’s role more challenging than it was 20 years ago.

The generation of 40-50 year olds straddle the line between wanting a face to face, trusted relationship with their adviser and being very focused on what they deem to be valuable, i.e. what they are willing to pay for, in that relationship.

FTA: How should advisers be tackling the challenges and the transfer of wealth between generations?

RV: Advisers need to be far more involved in the generational planning of the entire family; there is no point saving huge amounts of tax over what could be a 20-30 year relationship with the client only for it all to be thudded straight back into the estate of the successors with no planning behind it.

Many advisers in this area are only interested in taking on portfolios over a certain value; we look after the entire family, from complex IHT solutions, down to junior Isas for their grandchildren, because we value the long-term relationship. 

The gifting generation are open to generational planning to protect the assets they have worked hard for – and to have someone support them in making sure their children invest sensibly.

FTA: How are the next generation of wealth owners different?

RV: They have not achieved the same financial strength as their parents.

The gifting generation were generally free of financial burdens – mortgages, children – by their early 50s and worked until 65, giving them many years to put money away for investment. Saving was the norm and not buying anything until you could afford it was accepted.