In Focus: Intergenerational Wealth  

30 vs 60: Approaching clients' generational differences

FTA: Do you agree with the idea that older generations are more in tune with their finances and therefore more engaged?

TB: There is the stereotype that younger people are less engaged with their finances due to the more modern propensity to spend, but I actually think it is this generation who are more actively engaged for a number of reasons. 

Firstly, because they have to be. Employers are far less generous than they used to be, one example being that many older people can rely on more generous defined benefit schemes as opposed to having to actively manage a defined contribution pot as younger people do.

Other contentious financial issues that have made headlines for younger people, such as higher university fees and soaring house prices, have also prompted more engagement from younger generations. The role of the media in general has heightened younger people’s level of activity within their own financial planning, with more information available than ever before.

Conversely, older generations tend to be more relaxed about the speed of the financial information they receive as they have been subjected to less transparency from providers over the years and paper-based statements as opposed to instant access via more modern apps. 

FTA: How should advisers/providers be tackling the challenges and the difference in planning needs between generations?

TB: Advisers and providers can tackle these intergenerational differences by first and foremost acknowledging them. Understanding the personal and economic context within which an individual is approaching financial planning is a key step towards this. 

The role of the financial adviser is also shifting; where once it was to educate people based on a lack of readily available information, this has now changed to tempering people’s expectations due to the masses of disinformation online. 

FTA: How do the next generations looking for financial planning differ from their predecessors, and what must change to accommodate their needs?

TB: Younger generations are beginning to put their finances under the same scrutiny that they do with many aspects of modern life, particularly in terms of sustainability. 

Financial services must approach future generations' financial planning needs with a more focused ESG lens, and be prepared to cater to these needs with genuinely viable options. 

For providers, the transparency and speed of information younger people expect is also a massive generational shift. There could be a major upheaval for older and larger platforms and advisers who do not have the infrastructure to deal with this. 

With current legislation leaving fewer options available to younger people in terms of tax-efficient allowances (particularly surrounding pensions), younger generations will also expect advisers to offer a wider service, where all aspects of a person's financial plan are taken into account, as it will be these small marginal gains compounded over time that make the biggest difference for younger investors.